Buying silver, and other precious metals, has paid off handsomely for investors in recent years. Just look at silver’s performance over the past three years, five years and ten years: the gains are, respectively, approximately 100%, 133%, and 536%. Shorter term periods can be choppy, but we are not advocating people other than sophisticated investors get involved in short term trading–you should be in for the long haul. For most, buying silver should be about long term value appreciation, a hedge against the constantly declining value of paper currency.
Why not buy gold, instead of buying silver? We’re not pushing the potential for appreciation of silver over gold on this site. While it could appreciate faster, there is no way of knowing this. If you compare the price charts of silver and gold, you’ll see that they generally move in the same direction as each other. Although in recent years, silver has “caught on” with investors and has had more volatile swings, both up and down. While it overshot in 2011 on hype, as happens with all assets when a mania sets in, it seems to have settled down now at a more stable price. And that’s a good thing, you don’t want to buy silver after a parabolic rise. But, now that silver has been “discovered,” we feel it will experience less volatile swings in the future, and correlate more closely to percentage moves in gold.
Silver is also used in many more industrial applications that is gold. This can be a two-edged sword. In times of economic growth, industrial use of silver increases, a factor in contributing to rising silver prices; but, in contrast, slow economic times can see a decline in industrial use. But one thing is certain, there is only so much silver in the earth, and when silver is used industrially, it’s off the investor’s market. Less silver in circulation means higher silver prices.
Buying Silver is Affordable
The appeal of buying silver over gold is simple: it’s way less expensive. Not all investors have enough money to plunk down $1600 or so for gold bullion coin. But, silver bullion coins can be had for about $30 now. This enables the average person to add to their silver portfolio over time, in smaller, more affordable increments. You’ll also be able, with less funds, to more diversify the types of silver you purchase. At the current gold-to-silver ratio you can buy about 50 silver bullion coins for the same amount that you would spend on it’s more expensive cousin.
Buying Silver is Easy
There are a myriad of places you can buy silver. You can buy it online, you can buy it from a local store and you can even buy silver through Craigslist. And the nice thing is that you don’t feel like you need an armed guard to go with like you do when you purchase gold. You can buy a few silver coins here and a few coins there, never having more than a couple hundreds dollars worth of silver in your pocket. And while the reporting to the government of silver and other precious metals can be unreportable, you never know what the future holds when the time comes to sell your pieces. What if the government decides that all sales over a $1,000 threshold are reportable. You can’t break your gold coin in half, but you can sell the silver bullion in smaller quantities under the threshold. And what happens if, God help us, we have an economic collapse and people don’t want paper money? It’s easier to barter with smaller values of coin.
You Can Buy Silver in Many Forms
There are several ways of buying silver, and we cover them all in this website. The most common way is to buy silver bullion, which can be purchased in the form of silver bars, silver coins and silver rounds. There are also collectible silver coins, which is not recommended for ordinary silver investors, due to other factors that add and subtract to the value of the coin besides the silver content. You can also buy an Exchange Traded Fund (ETF) — like a stock — whose price correlates closely with physical silver. Also on the stock market, you can purchase silver mining stocks, but this is really only for experienced investors who can analyze publicly traded companies.
Some people recommend only buying physical silver, avoiding stocks and ETFs. While understand their concern, we don’t necessarily take that view; you can read more about that subject on our silver “paper” investing pages.
Buying Silver is Fun!
Going down to your local silver dealer and buying silver bullion coins is a thrill. They feel good in your hands, unlike that dirty paper money that becomes worth less and less every year. You can stack them, you can flip them, you can frame them..honestly, they’re just so much fun to handle. And again, as opposed to gold, you won’t feel like it’s something too valuable to play around with.
Read our expanding website filled with informative pages and educate yourself on everything silver. Then, get your hands on some. Or diversify your IRA by adding a bit of silver ETF.