Last updated on May 2nd, 2024 at 03:35 pm
Last Updated on May 2, 2024 Posted by Colonial Acres Coins
Investors like to spread their risk and want to have diverse portfolios, and this means that it is important to understand various investment options and opportunities.
Investing in silver bullion is one option that needs to be carefully considered when you make a decision about what to do with your money. There are currently a number of compelling reasons to add physical silver bullion to your investment portfolio.
Silver is a real physical asset
The modern world of investments is driven by paper profits, digital trading, and currency creation but there are few investments that you can physically carry in your hands (or pockets) wherever you travel around the globe and has value regardless of where you are. Silver bullion is a hard asset and coins and bars can be sold virtually anywhere in the world.
Physical silver has a long history of being used as currency and it has no default or counterparty risk, meaning that you don’t need another party to make good on a contract or promise to access your funds. And while theft is a risk when you own silver, you can keep your stash of silver bullion private and confidential and your investment is protected from the threat of hacking and cybercrime which is currently far more prevalent than housebreaking.
Silver may not have the same gravitas as gold but, like gold, it is still a real, tangible form of currency. It can’t be created out of thin air like stocks or shares, it does not exist only in cyberspace and it can’t be printed like money. Silver is a metal that needs to be mined and processed and therefore there is a limited supply.
Demand is growing
Global demand for silver is growing and virtually all major government mints have experienced record sales levels. Silver is the most electrically conductive, thermally conductive, and reflective of all the elements and it is used in many major industries, from electronics to solar panels. In fact, barely a day goes by that you don’t use a product that contains silver. For example, every cellphone contains approximately one-third of a gram of silver, that means 1.9 billion grams of silver will be used in cellphones alone and it is figures like that that are driving the demand for silver. Silver is also used in self-heating windshields of vehicles and the photovoltaic cells of solar panels to name just a couple of other uses of this indispensable precious metal.
Supply is falling
The silver price crash in 2011 resulted in mines cutting costs to make profits and this meant that there was a dramatic reduction in exploration and development of new silver mines. The effects of this lack of exploration and investment in new mines are now being felt throughout the industry as demand rises but supply drops and if this trend continues at its current rate, the price of silver will continue to rise.
Silver is cheaper and outperforms gold in a bull market
Silver is much more affordable for the average person than gold, but it is still a good investment. If you can’t afford to buy a full ounce of gold, you should consider silver bullion. The silver market is small and any movement of money in or out of the market can have a significant impact on the price. This volatility means that in a bear market, silver falls more than gold but in a bull market it climbs quicker and higher than gold. As a precious metal, silver should also prove to more inflation-resistant than certain other investments.
There is no such thing as the perfect investment and all markets fluctuate but it is important to make wise financial decisions based on reliable information and to have a diverse portfolio. In the current economic climate, some silver bullion as an investment would not go amiss.
