Saving for the future is more complicated than just stashing your money in a bank account. The problem with just putting your nest egg in a savings account is that, over time, inflation makes your money less valuable. Putting your money into the stock market is a better bet if you want to maintain your purchasing power over time. But the stock market can be volatile, too.
What about investment in precious metals? Precious metals like gold, palladium, and platinum can serve as a hedge against inflation while protecting your wealth from the vagaries of a volatile stock market. But the high price point of these metals means they’re not accessible to many investors.
Silver, however, has a long history of use as a currency and a low price point that makes it accessible to a wider range of investors. But is silver really a good investment? Buying this precious metal can have a number of benefits, as long as you’re aware of the drawbacks of investing in silver, too.
Silver Can Protect Your Money from Inflation
Whether you’re saving money for retirement or for a rainy day, you want to make sure that you protect your wealth from inflation so that when it’s time to spend your savings, you have the same purchasing power as you did when you socked the money away. Because silver holds inherent value, when inflation makes your money less valuable, silver just becomes worth more money.
However, silver has a lot of industrial uses, and that can affect the price of the metal. High industrial demand for silver, such as might occur when the economy is booming, will drive up demand for the metal and its price, as well. When industrial demand for silver falls, either because of an economic recession or a change in manufacturing processes, the price of silver will fall, too. Silver’s intensive use in industrial applications means it’s more volatile than gold, the other most popular precious metal for investors. While that can mean the price of your silver could fluctuate wildly, it also means that you have an opportunity to realize strong profits from the sale of your silver if you sell it at the right time. You can also wait for silver prices to dip if you’re looking to get good deals on silver bullion, stocks, mutual funds, or exchange-traded funds (ETFs).
Silver Is More Stable than Stocks
Most people save for retirement, sending kids to college, and other long-term financial goals by investing in the stock market. That’s a better option than just sticking money in the bank, because, historically, the stock market outperforms inflation.
However, the stock market can be volatile, too, and you should be prepared for that by putting some of your money into investments that aren’t tied to the performance of the market. Silver could be one of those investments. While silver can be volatile due to its use in industry, the value of silver bullion won’t be as closely linked to market performance. You can protect some of your wealth by putting it in silver.
You Have Options for Investing in Silver
When you think about investing in precious metals, you probably think about buying bullion and storing it in a safe deposit box, a safe at home, or a precious-metals storage facility. Those are all options for precious metals investors, but you can buy silver without buying actual physical silver.
For example, you can buy shares of mutual funds or ETFs that hold either physical silver or shares in silver mining companies. That way you can hold silver as a hedge against inflation and stock market crashes, without the hassle of storing physical silver – which can get cumbersome and expensive, considering that large quantities of silver are relatively cheap compared to gold and other precious metals. You can also buy stocks in silver mining and streaming companies, which can diversify you into precious metals and give you the stability of precious metals with, again, the versatility of a stock when it’s time to sell. In general, it’s usually easier to sell shares of a mutual fund, ETF, or silver company than it is to sell physical bullion.
Is it a good idea to invest in silver? It can be, especially if you’re wanting a conservative investment vehicle that can protect your money from inflation and stock market volatility while offering growth potential in the long and short term. Buy silver today, and protect your wealth for the future.