Why Buy Bullion?
Why Buy Bullion? Why Should You Invest in Silver?
Many people turn to precious metal investing as a way to diversify their portfolios. This is because silver and other precious metals don’t typically correlate with stocks and bonds. So, if your stocks and bonds aren’t doing well, you may be able to see some gains in your precious metal investments.
While gold is the most popular precious metal, it isn’t the only one worth looking into. Silver, palladium, and platinum are other popular precious metals, and each comes with its own risks and opportunities.
While you can invest in silver and other precious metals by purchasing them physically and storing them, other investment options are available, such as a silver IRA or ETF.
Types and Forms of Precious Metals
Before we dive into the how and why of silver investing, let’s first discuss the types and forms of precious metals. As mentioned, there are other precious metals worth investing in besides silver. Here’s what to know about the different types of precious metals.
Silver
Silver is the second most popular precious metal to invest in after gold. Many investors prefer it because it’s much cheaper than gold.
However, silver is used heavily in the technology sector and other industries, making it more sensitive to changes in the economy and, therefore, more volatile.
Gold
Gold is the most popular precious metal to invest in. It’s durable and has many industrial uses, although it’s primarily used to make jewelry. Gold has low volatility and has proven to maintain its value, which can be very useful as a hedge against inflation.
Additionally, gold is easy to sell, and because it has been around for thousands of years as a currency, it can protect you during a market collapse.
Platinum
Platinum is a soft metal with a white-silvery hue that’s mainly used in the automotive industry. It’s highly resistant to corrosion, and due to its scarcity, it holds some investment value, though not to the same extent as gold and silver.
Palladium
Palladium is used in dentistry, medicine, electronics, and industrial products. Like platinum, it’s resistant to corrosion, and it’s actually rarer and more expensive than gold and silver, making it a good investment option.
All of the above precious metals can be purchased in various forms, such as silver coins, silver bullion, silver bars, or jewelry.
Benefits of Investing in Silver, Gold, and Other Precious Metals
While investing in precious metals isn’t as popular as investing in stocks and bonds, precious metal investment still offers many benefits. Here are some of the top reasons to buy silver and other precious metals.
Low barrier to entry Typically, to invest in stocks and bonds, you need to work through a broker. If you want to invest in real estate, you usually need to work with a real estate agent. However, with silver and other precious metals, you can make your purchases without needing to work with a middleman. This is especially true if you buy physical precious metals or ETFs (more on these later).
A tangible asset with universal value
Silver and other precious metals are tangible assets, meaning you own them outright, and you have full control over when you want to sell them or pass them on to your heirs. Additionally, precious metals have universal value, meaning your metals will maintain the same value in the USA as they would in any other country.
Hedge against inflation
As mentioned, precious metals serve as a hedge against inflation, meaning their value won’t drop if the stock market crashes. And, unlike other physical assets that often depreciate with time, precious metals retain or appreciate in value.
High liquidity
Precious metals have a high liquidity level, meaning they’re easy to sell, and there will always be eager buyers on the market.
Portfolio diversifier
Silver and other precious metals also help you diversify your investment portfolio. It’s never smart to have your investment portfolio made up of just one type of asset. Silver and precious metals are excellent for diversifying as they’re non-correlated assets, meaning their prices move independently of the global economy.
What Affects the Price of Silver and Other Precious Metals?
Since silver and other precious metals don’t correlate to the global economy, you may be wondering what affects their price. The price of precious metals is affected by a combination of supply & demand together with investor behavior. Silver serves as a hedge against inflation, and many investors flock to silver and other precious metals during economic crises.
Additionally, it’s important to remember that silver and precious metals are used in the jewelry industry as well as many other industries. So, if demand spikes in an industry that uses precious metals, prices can go up as the supply lessens.
Silver and other precious metals also need to be mined. However, most of the silver that is easy to access has already been mined, meaning it takes more manpower and costs a lot more to get less silver. Therefore, as the cost of production rises, so too can the price of precious metals.
