One investment guru urges you to invest in silver. Another recommends caution. Which one is right?
Both of them offer valid ideas, though they should be weighed unemotionally and without pressure. Caution is an excellent idea at all times whether investing $100 or $1,000. Markets go up and down constantly, including the market for silver.
While waiting a day to buy could see the price go up and you miss out on the option to sell during that window, it might also go down suddenly after you buy it, leaving you with stock that needs time if it is going to climb again — but it will. History virtually guarantees that much.
The Pros of Silver
Silver has kept its purchasing power over centuries because, like gold, it is always recognizable as a form of hard currency. When the American Dollar is only fit for lining a budgie cage, silver will be exchanged for necessities and recognized internationally between high-level traders. If you have a physical stock of gold in your possession, this is much better than owning, say, an investment in oil or energy which cannot be traded for food, clothing, or heating.
Silver is industrially useful with applications in technology, radiography, automotive manufacturing, photography, and photovoltaic solar panels.
Industry executives from around the world trade in silver from a different angle to what household consumers are concerned with. Stocks of silver are valuable enough in the industrial market place to be easily liquidated and rare enough to maintain a minimum value. Despite the many locations where it is mined across the globe, supplies of new silver are dwindling.
Cons of Silver
Silver is known to be unpredictable. It rises and falls, sometimes without much warning. Writers keep warning about a price threshold, suggesting that silver is fast reaching its latest peak. Silver will be dumped back onto the market where low prices will see it seized up, becoming rarer and more valuable again until the cycle repeats itself.
Silver is also worth about 1/10th what gold will fetch. If you had to choose one, gold would probably be the better investment in some eyes, even though current market activity suggests the opposite.
How to Invest in Silver
There is physical silver and there are shares in silver companies and mines. The one with the greatest security is physical silver. Shares in mines and companies are more susceptible to sudden changes, but they can make a short-term investor much wealthier than real silver if his timing is excellent and he wants an investment to come to fruition quickly. There is also the potential for giant losses in the immediate future.
Silver bullion and coins are popular investments for IRAs and other retirement packages. Only a small number of products are eligible for administered accounts of this kind but customers can buy any silver coins they want, such as collectible and rare pieces, and hold it in a safety deposit box as security in a time of financial crisis.
All of these same rules apply to gold, palladium, and platinum. Investors are not just weighing up the value of silver but also comparing it to their other options. This adds greater confusion to a difficult decision. Investment experts are simply dumbfounded that silver is in such big demand, but notice: it is much cheaper to buy per ounce than any of the other three precious metals mentioned above.
Where Does Silver Come from?
Among more than 20 countries currently mining silver are Mexico, Canada, the United States, Russian, and Argentina. It appears that veins of this precious metal cross the globe. Mexico is the biggest producer.
Companies mining gold currently include Glencore XXStrata PLC from Switzerland, Teck Resources Ltd of Canada, Fresnillo PLC from Mexico, and Volcan Cia Minera S.A.A. of Peru. If you want to bet on the continuing validity of mining, these are the companies to invest in.
Jewelry, Ornaments, and Heirlooms
While there is always the option to buy several ounces or even kilos of silver bullion bars and bullion coins from Canada or the United States (two countries whose currencies are approved for IRA investments owing to their exceptional purity), another option is to own silver in forms sitting around your home, not locked away but stored in a closet or a drawer.
Maybe you have numerous valuable pieces organized in a sideboard, such as a tea set for cream and sugar with a small platter or silverware your mother used. Perhaps some of your jewelry is made from sterling silver.
Items like these are ripe for the picking by thieves with keen eyes for valuables that can be liquidated quickly. They are also portable and non-reportable. The IRS does not need to know about the silver service in your sideboard. In an emergency, it can be sold to a trader, the cash used to fund a medical treatment or pay for groceries.