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Is Silver The New Gold Of The Investment World?

The market’s up… the market’s down.  With the current global political climate, markets worldwide are unsettled and volatile, something that’s unlikely to change any time soon. Traditionally, precious metals have been the investor’s go to in an uncertain market, but as was forecasted back in 2016, this year the market has started to break down. While this is not great news if you currently hold large volumes of silver in your portfolio, it could be great if you’re looking to make a long-term investment.

Why Invest In Precious Metals?

Stocks, shares, exchange-traded funds and mutual funds are the backbone of investments, but there are several key reasons why precious metals are the fall-back position in uncertain times:

  • They are physical items – unlike stocks and shares, precious metals are hard assets: a glitch in the banking system can’t wipe them out, and banks can’t just ‘print more’ to devalue it like regular paper currency.
  • They are universal – currencies differ worldwide, but a piece of precious metal is the universal currency.
  • Supply is falling as demand is growing – traditional metal mining is decreasing worldwide, but silver in particular is seeing more use and growing demand.  It doesn’t take a genius to realize that the value of anything will go up when demand outstrips supply!

Gold Or Silver?

While silver has conventionally been seen as the poor relative to gold, historically it tends to perform very similarly.  One key difference though, is that as silver has more industrial uses than gold it can suffer more volatility – which is why gold has traditionally been more stable and more highly valued.  However, silver is being used more and more in both industry (especially in growing areas like solar powered energy) and the jewelry market (which has traditionally been dominated by gold), making it a great time to invest in it.

Where To Start

With the market for silver in particular so low, now could be a great time to buy in and expand your portfolio.  Although it is possible to invest in silver through stocks and shares (either through an exchange-traded fund or directly in silver mining companies), the advantages above mainly relate to physically owning silver.  For the average investor it may be best to start small: one good option may be to buy silver eagles, which have the dual promise of being worth their weight in silver and the potential to become a future collectors item, and the advantage that you can buy in small quantities.

Weigh The Risk

As with any investment, remember that at any given time the value of it can go down as well as up, but with the current low price, the likelihood of increased future demand, and the general benefits of investing in precious metals, now is looking like an excellent time to invest in silver.