While silver can be volatile, the precious metal is also considered a safe asset, similar to gold, its sister metal. Safe assets can protect investors in times of uncertainty and, as tensions rise, they could be a good option for those seeking to preserve their wealth during difficult times. Investors like silver for many reasons, but many see it as a store of value in times of uncertainty, while others consider silver and other precious metals, such as gold, to protect against inflation. Jeff speaks regularly at conferences on precious metals, is a member of the board of directors of Strategic Wealth Preservation in Grand Cayman and provides exclusive analysis and market commentary to GoldSilver clients.
Gold and silver are especially popular commodity investments, largely because of their historical relationship with money. If the price of silver goes up, you can make a profit with silver coins and ingots, but that's the only way to make money here, since the physical product doesn't produce cash flow, unlike a quality business. Since it is traded less than gold, silver can demonstrate much greater volatility or price fluctuations than its brilliant premium, such as rising 13% in a single day, for example. You can buy silver through local dealers and pawnshops or from online retailers such as APMEX or JM Bullion.
Investing in silver isn't a good option for everyone, and some investors prefer to focus on companies with cash flow rather than investing in the metal itself. Many miners are risky equipment, and some have yet to dig a hole in the ground, let alone extract silver from it. Its high conductivity and resistance to corrosion make it necessary for conductors and electrodes, and almost all electrical connections in an electric vehicle use silver. Silver maintains its value over the long term and does well when interest rates are low and fixed-income investments don't generate much profit.
Silver may be a cheaper alternative to gold, but it also involves unique considerations and risks that investors must consider. You'll have the potential reward for having silver if the price goes up, but you'll run fewer risks, such as theft. In a world of paper earnings, digital trading and currency creation, physical silver contrasts with the few assets you can carry in your pocket wherever you go, even in another country. This is the purest form of investment in silver, but it involves problems and expenses related to storage.
Here's what you need to know about investing in silver and how to determine if it's a good investment.