When comparing silver and gold, it’s easy to see why more people would choose gold instead of silver especially if the only thing you get presented with is the price per ounce. If all you look at the price, it’s possible to miss the fact that over time silver has outperformed as far as investment returns are concerned. Silver is always in high demand because of the many industries that use or rely on silver to perform. You can always hope for some return when you buy silver bullion. Silver is also accessible to small-time investors who don’t have hundreds or thousands of dollars to spend on investing in precious metals.
For millennia silver has been regarded as currency. These days silver investors have multiple options to meet a variety of investment goals.
There is always a demand for silver.
Investors can buy pure silver bullion, coins and rounds easily and store it privately or in a special depository.
The low price of silver means that small gold dealers can take advantage of the precious metal’s low prices. It offers an easier entrance into the precious metals market for investors.
The price of silver means that investors who can enter the market at a cheaper rate. Silver has an excellent track record. The fact that it has been used as currency for millennia puts it as a great investment option. You don’t need hundreds and thousands of dollars to participate in the silver market. Usually It’s the best time to buy silver when stocks are crashing when the economy is not doing well. Prudent investors shift what would have gone into a savings account towards silver.
Silver as insurance
Silver investors turn to this precious metal when they are afraid of long-term economic stagnation. Right now a solid economic recovery seems dim as the financial crisis lingers and more financial systems look like they might collapse any time soon. If the interest rates keep being low they might drive inflation higher and refuel the world’s financial troubles.
Silver and Inflation
Inflation has hit a 13-year high and economists are worried about it reaching double digits. Precious metals are a great way to protect the assets you have by investing in silver.
Silver has a positive correlation with inflation. Basically, when inflation rises, the value of paper currency also drops mainly because it is not backed by anything tangible. Silver on the other hand gains from a weak currency and high inflation. Silver like gold is a good inflation hedge.
Investing in silver is a good way to protect your assets in times of economic turmoil and against the ever-present long-term threat of inflation.
Not only can silver be an effective hedge against inflation but it is a great way to diversify your investment portfolio.
But why are more people looking at silver right now?
The main reason is that the demand for the metal has gone up over the last few years. If the global economic crisis doesn’t let up, silver will continue to be attractive for a while. At the rate that things are going the price of silver is likely to continue going up. In fact, the silver price has quadrupled since the 2008 global financial crash. Some economists predict that the silver price could reach $50.00 an ounce.
The bottom line is that it seems to make better sense to buy silver bullion as long as it takes for the economy to recover significantly.