Is Silver A Good Long-Term Investment?

Silver

Published: June 16, 2022

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When it comes to investing in precious metals, gold is by far the most valuable, but is silver also a good long-term investment? In this article, we will explore the pros and cons of investing in silver and help you decide if it is the right choice for you.

The History of Silver as Currency

Silver has been used as a form of currency for centuries. It was first used as currency in Turkey in 3000 BC. Since then, it has been used for currency, jewelry, and trading by many different cultures worldwide.

The benefits of silver are that it is abundant and relatively easy to mine. It is also durable and does not corrode like other metals. For these reasons, silver has been a popular material for currency, jewelry, silverware, and more for thousands of years across multiple civilizations.

However, there are also some drawbacks to using silver as currency. One drawback is that it is not as valuable as gold, so in order to hold the same value, you’d need significantly more silver. This created issues when it came to secure storage and transportation of the silver and led to a preference for gold.

Why Should You Invest in Silver?

While many people are interested in investing in gold due to its value and as a hedge against inflation, you might be surprised to find that silver is a great investment option.

Just like gold, silver makes an excellent hedge against inflation. Also, since silver isn’t directly related to asset markets like real estate, silver will typically maintain its value when those markets are falling.

Silver also has various industrial uses like solar panel production. This means that the demand will stay high in a strong economy, if not increase, due to expanding manufacturing.  This also helps stabilize the price across a wide range of market conditions.

Is Silver a Great Long-Term Investment?

The short answer to this question is yes. Before we get down to the practicality of silver as a long-term investment, let’s first discuss why long-term financial investments even matter.

When a country’s economy begins to experience inflation, this has a direct impact on the value of your cash holdings. For example, an item that would have cost you $10,000 in 2017 would cost about $12,036.62 in May 2022. This means if you were keeping cash “under your bed,” that same cash would lose a considerable amount of value in just five years.

Investing in long-term, concrete assets is an excellent way to hedge against inflation and keep a cash reserve. Unlike cash, the value of silver will continue to appreciate on its own, and in most cases, this appreciation outpaces inflation.

For example, let’s say you invested that same $10,000 into silver in 2017 for $17.29 per ounce. That same investment would be worth about $15,882.35 today, a nearly $6000 growth in your investment instead of a loss.

For this reason, silver is an excellent long-term investment. Silver is a tangible asset that has been used as currency for centuries. It is abundant, durable, and has various commercial and industrial uses.

If you are looking for a safe investment option that will protect your wealth in the event of inflation or economic collapse, silver is a great choice. Investing in silver is a smart and practical way to ensure your financial security in the years to come.

How to Buy Silver: 5 Primary Methods

If you’re interested in investing in silver, there are five primary ways to get into the market.

Buy Silver Coins or Bullion

This is the most common way to invest in silver. You can buy physical silver coins or silver bars from various dealers like Noble Gold Investments. Investing in silver bars is one of the most efficient ways to purchase silver, but it also can create storage issues. In these situations, it’s usually best to work with a secure storage facility.

You can also buy various silver coins, such as the American Silver Eagle, Canadian Silver Maple Leaf, or the Austrian Silver Philharmonic. The size and weight of these coins vary, so you can choose the option that best suits your needs. The downside of buying silver coins is that they may be subject to capital gains tax when sold.

Silver Futures Contracts

A silver futures contract is an agreement to buy or sell a certain amount of silver at a set price on a future date. This type of investment is more speculative than buying coins or bullion, but it can be more profitable if silver prices go up.

The downside of investing in silver futures is that you may have to put up a large amount of money as collateral, and there is always the risk that the price of silver could go down instead of up.

Silver ETFs

A silver ETF, or exchange-traded fund, is a type of investment that tracks the price of silver. This means that you don’t own any silver, but you will benefit from changes in the price of silver.

The downside of investing in a silver ETF is that you will not be able to take physical possession of the metal.

Silver IRA

A silver IRA is another way investors can put money into silver and receive short-term tax advantages. Like any other IRA, when you invest in a silver IRA, you can deduct your investment from your yearly income, lowering your tax liability.

However, unlike a silver ETF, you own the physical silver you’re investing in when purchasing a silver IRA through Noble Gold Investments. What’s even better, your IRA silver will be stored in a secure facility so that you won’t have to deal with any of the headaches involved with security, storage, or transportation.

Silver Mining Stocks

If you’re looking for an alternative investment path to get into silver, buying stocks in silver mining companies is an excellent way to do it. This can be a more speculative investment, as the success of these companies depends on many factors, such as the price of silver, the cost of production, and geopolitical factors.

The upside of investing in silver mining stocks is that you could see a higher return if the company is successful. The downside is that there is more risk involved.

ETFs That Own Silver Miners

The final way to invest in silver is by buying ETFs that own silver miners. This is a more diversified investment, as you are not just investing in one company but spreading your risk against multiple companies or the industry.

The downside of this method is that you will not be able to take physical possession of the silver, and there is always the risk that the price of silver could go down instead of up.

Scenarios When You Should Invest in Silver

If you’re waiting for the right time to invest in silver, here are some ideal scenarios:

Supply and Demand are Out of Tune

The law of supply and demand is the most important factor in the price of silver. If the demand for silver exceeds the available supply, the price will go up.

This happens when investors are buying more silver than miners can produce. It can also happen when central banks purchase large quantities of silver to build up their reserves.

When there is more demand for silver than the available supply, it’s a good time to invest.

The Dollar is Losing Value

If you’re worried about inflation or the dollar losing value, investing in silver can be a great way to protect your wealth. Silver has historically been a good hedge against inflation, as its price tends to go up when the cost of living increases. It can also be an excellent way to diversify your investment portfolio, as it is not affected by the same economic factors as stocks and bonds.

The Economy is Slowing Down

Investing in silver can be an excellent way to protect yourself from an economic downturn.

While the price of silver may go down in the short term when the economy slows down, it will usually rebound quickly when the economy starts to recover.

This makes silver an excellent long-term investment, as you will eventually see a return on your investment when the economy improves.

A Well-Priced Company Becomes Available

If you’re looking for a good deal on a silver mining stock, it’s important to watch for companies that become undervalued. This can happen when the price of silver decreases or when a company experiences some financial trouble.

However, it’s essential to do your research before investing, as not all companies will rebound similarly.

You Need to Hedge Your Portfolio

If you’re worried about the stock market, investing in silver can be a good way to hedge your portfolio. This is because silver prices are not directly affected by the same economic factors as stocks.

While the price of silver may go down in value when the stock market crashes, it will usually rebound quickly when the economy starts to recover.

You Want to Take Physical Possession of Your Investment

If you’re looking for an investment that you can hold in your hand, buying physical silver is a great option. You can buy bars, coins, or rounds from dealers or mints worldwide.

The downside of this investment is that you will have to pay for storage and insurance, and there is always the risk of theft.

You Want to Add Tangible Commodities To Your Portfolio

Investing in silver can be a good way to add tangible assets to your portfolio. This is because silver is a physical commodity that can be bought and sold.

It’s also relatively affordable, which makes it a good option for investors just starting out.

When You Shouldn’t Invest in Silver

Just like with any investment, there are times when it’s not a good idea to invest in silver. Here are some scenarios when you should avoid investing:

You’re Looking for Quick Profits

If you’re looking for quick profits, investing in silver is not the best option. This is because the price of silver can fluctuate significantly in the short term.

It’s also not as liquid as other investments, so it can be difficult to sell quickly if necessary.

You’re Not Ready to Handle Volatility

The price of silver can be volatile, so you must be prepared for the ups and downs. If you’re not comfortable with this level of risk, investing in silver may not be the best option for you.

You Don’t Have a Long-Term Investment Timeline

If you’re not planning on holding your investment for at least five years, investing in silver is probably not a good idea. This is because it can take time for the price of silver to go up.

Investing in silver is a long-term commitment, and you must be patient if you want to see profits.

Important Tips for Investing in Silver

Now that you’re fully aware of the pros and cons of investing in silver, here are some tips to help you get started:

Understand the Market

Before you invest in silver, it’s important to understand how the market works. This includes knowing the different types of silver, as well as the factors that affect the price.

You can learn about this by reading books, articles, and research reports. You can also talk to other investors and get their opinion on the market.

Set a Budget

It’s important to set a budget before you start investing in silver. This will help you keep track of your expenses and avoid overspending. When selecting your budget, be sure to factor in the cost of storage and insurance. You should also set aside money for taxes if you plan on selling your investment later down the road.

Choose Your Investments Wisely

There are many different ways to invest in silver. You can buy physical silver, ETFs, stocks, or futures contracts.

Each option has its own risks and rewards, so it’s essential to choose an investment that fits your needs.

Be Patient

Investing in silver is a long-term commitment, and you need to be patient if you want to see profits. The price of silver can fluctuate significantly in the short term, so don’t expect to get rich quickly.

If you’re patient and disciplined, investing in silver can be a great way to grow your wealth over time.

Invest Regularly

One of the best ways to make money in silver is to invest regularly. This means buying silver on a regular basis, even when the price is down.

By investing small amounts of money over time, you can take advantage of dollar-cost averaging. This technique can help you lower your overall investment costs and make more money in the long run.

Open a Silver IRA Account with Noble Gold Investments

If you’re ready to start investing in silver, Noble Gold Investments can help. We offer various silver products, including coins, bars, and rounds. You can plan for retirement with a gold or silver IRA or just purchase silver bullion to store at home.

We also have a team of experts who can help you choose the right investment for your needs. Open an account today to get started.

 

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