Previously we’ve talked about the reasons for investing in bullion. In this blog we’ll discuss the advantages of silver and why buying silver in bullion or coins might be a good addition to your overall investment portfolio.
Silver Has More Uses than Gold
Gold is primarily in demand for jewelry or as a store of value. Silver has many practical uses beyond jewelry and silverware. Products in a wide variety of industries from electronics to solar panels require small amounts of silver in order to operate. You may not see it, but silver is in a whole spectrum of products. It’s prized for its attributes, including the ability to reflect and conduct heat and electricity. Because of this, when the economy is rebounding or expanding, the demand for silver increases even as the demand for silver as a store of value drops.
Silver Is More Affordable than Gold
Much more silver is available for sale every year than gold. The annual supply of silver is about 1 billion ounces while the annual gold supply is only 120 million ounces. By the basic economy law of supply and demand, then, silver will be less valuable. This lower price point makes it much easier for a buyer to purchase silver as an investment. If you have some extra money laying around, it’s simple to put it in silver.
Like gold, silver is a hard asset. It’s tangible. You can hold it, keep it, and store it on your property. It can be stolen, but it can’t be hacked. No matter what the stock market does, silver has intrinsic value to people. As such, silver is always currency. You can trade for products and services with silver. It’s been used to make coins for thousands of years. Kings and countries have minted silver coins far more often than gold coins. These coins - unlike your checking or credit card accounts - can be used privately and confidentially. If you want to buy something without that purchase being tracked, you can use silver or other precious metal coins. In an age of privacy concerns, this is a real advantage.
Silver Is More Volatile than Gold
Relative to gold, silver rises more on up days and falls more on down ones. While this can be a bit nerve wracking for an initial investor, this also means that it performs better in bull markets, and long term you can make more money on silver than on gold if you buy and sell at the right times. If you are looking to buy silver and hold on to it or you are committed to watching the markets and acting when the market looks to be peaking, silver may be a great investment vehicle for you.
If you are considering buying silver bullion or coins, you must also factor in how you will store it. Since the price of silver far less than the price of gold, you have to buy a large quantity of silver to match the investment of a few gold coins. You will not want to leave it out anywhere people can see or access it. Purchase a safe or rent safety deposit boxes to store silver in quantity. Consider insuring your bullion or coins as well as anything tangible can be stolen.
Coins and bullion are long-term investments. The price of silver varies, so it’s better to purchase coins or bullion with the idea that you will hold it for years or even decades. At Grand Rapids Coins, we advise our customers to acquire high quality collector coins and gold and silver bullion coins in addition to a diversified portfolio of other investments. Bullion coins are an effective hedge against economic or market instability, but they should not be your only or primary investment or where you put the bulk of your savings. If you are interested in buying silver, we would be happy to advise you on what to purchase. Don’t hesitate to call us. A new year is a great time to make new investment choices.