The Truth About Silver as an Investment

Even among investors who gravitate to precious metals for portfolio security and balance, the star of the show is gold, not silver. But the last few years have witnessed a growth in the number of people who view silver as a viable part of a conservative portfolio. It’s rather common for financially savvy people to include a wide range of things within a typical retirement portfolio, including stocks, bonds, precious metals and the like.

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In fact, most serious-minded adults have adequate life insurance protection as well. Shortly after getting their first big job or soon after getting married, many people try to locate a company that can sell them a life insurance policy. After getting an estimate from Mason Finance, or another major company, they begin to build the rest of their financial security. For those who want to know how silver might be a part of their financial future, here are some basic concepts about the pros and cons of putting your extra dollars into the shiny stuff, along with some enlightening facts:

Silver Data That Makes a Difference
Silver is highly prized in industry because it has the best electrical conductivity of any known metal. It’s also slightly more durable than its most famous cousin, gold. Historians think that people who lived as long as 3,000 years ago learned to separate silver from lead. On both a daily and monthly basis, silver and gold price directions are correlated more than 70 percent of the time. In other words, when gold goes up, silver usually does too, but not by the same amount.

Pros of Investing in Silver
Silver has a huge upside potential because of its volatility. That means swing traders and other short-term enthusiasts stand to make a significant profit on a silver investment. Secondly, anyone can purchase a large amount of silver without spending a fortune. For amounts under $5,000, it’s possible to store a 1 kilo silver bar in a home or in a safe deposit box.

Finally, silver would be a more practical means of trade in an emergency. An ounce of gold is too expensive to trade for bread or fuel. An ounce of silver would be ideal for barter trade.

Cons of Buying Silver
If you have more than a small dollar amount of silver, you’ll need to pay for secure storage. Consider that, unlike gold, silver takes up a significant amount of space once you acquire more than a few thousand dollars’ worth. Imagine that you wanted to store $10,000 worth of gold in your home, admittedly an unwise move. Better to use a safe deposit box, but no matter where you stash the gold, $10,000 is less than eight ounces, which takes up about as much space as a handful of coins. Multiply that amount of space by 100 for silver. It’s just not practical to store silver, and sometimes even a bank’s safety box is not sufficient.

For investors who think gold is a see-saw investment, silver is even more of an up-and-down ride. One of the many reasons for this volatility is the fact that silver is both an industrial and investment metal. It has an intrinsic value, like gold, but is widely used in manufacturing and other industrial applications. When those related markets veer up or down, so does the price of silver. The metal is best for very long-term investing rather than short-term. If you don’t like big price swings, stay away from silver.