Last Updated on May 31, 2022 Posted by Colonial Acres Coins

The Risk and Rewards of Investing in Silver Bullion

Precious metals have a high economic value because of their comparative rarity. Because of their intrinsic value, investing in precious metals is common. The most popular precious metals to invest in are platinum, gold, and silver. Silver bullion in Canada is intended specifically for purchase by investors in the form of either coins or bars. The potential rewards of investing in silver bullion are great, but there are also significant risks involved.

Potential Risks of Investing in Silver Bullion

When you buy bullion, it can be difficult to store. This is especially true of silver bars as they are large and heavy. The more bars you buy, the more difficult it may be to find a place to put them. Silver bullion coins are smaller, lighter, and more portable, but you may still find it hard to find a place to store them. As with bars, the problem becomes more significant the more coins you buy.

When you invest in silver bullion, you may have to pay extra fees not required for other investments. For example, if you store the bullion off-site, you will have to pay storage fees. You should insure the silver to protect your investment, and this means paying insurance premiums. The retailer has to charge a premium on the silver to turn a profit, and there are also  shipping fees to have the silver sent to your location.

Unlike some other types of investments, silver bullion doesn’t generate cash flow for you. The value may increase while prices rise, but you still have to sell the silver to make a profit off it. Furthermore, like other commodities or stocks, the price of silver fluctuates. Your silver may eventually be worth more than you paid for it, or it may be worth less, depending on market demand. Like with stocks, the best advice is to buy it when the price is low and sell when the price rises.

Potential Rewards of Investing in Silver Bullion Canada

Despite the risks involved in investing in silver bullion, the rewards can be great as well. For example, with so many investment assets being intangible, it can be reassuring to have a physical asset that you can hold in your hand. While silver can tarnish, it doesn’t break down with exposure to water or weather and can withstand fire, meaning that you are unlikely to lose your investment due to an accident or an act of nature.

The value of real estate, stocks, and bonds can all fluctuate in response to changes in the markets. Silver bullion fluctuates too, but it has an intrinsic value beyond that of  the markets. That makes it an excellent way to diversify your portfolio, thus making it more resilient to market changes. Silver is also a good hedge against inflation as the value tends to rise as the prices go up.

Silver is not only an investment commodity, it is also put to industrial use to make components for certain electronics. As long as this remains true, the demand for silver should remain high, which in turn should keep the value fairly stable.

Any sort of investment can be risky, but the rewards of investing in silver bullion can be great. If you are ready to make the commitment, Colonial Acres Coins offers many buying options.