Is silver a good investment?
Whenever we talk about investing in the stock market, gold and other precious metals tend to come up as great options. This is largely because silver has been considered a safe-haven asset since its discovery over 2000 years ago. It's an interesting question, but there are two ways to look at silver. One is as a long-term investment, the other as a short-term investment before deciding if silver is a good investment:
- Silver as investment for the Long-term. Because of its closer ties to industry than gold, which experienced only 8% usage in technology in 2020, silver price tends to increase concurrently. The demand for silver will rise even further because of newer technological applications like 5G and electric vehicles as well as a shift to renewable technology sources like solar. These characteristics make it a great commodity for diversification because it attracts both safe-haven and industrial drivers.
- Silver as investment for the Short-term. Because silver is considerably more readily available, its price fluctuates much faster and offers a significantly higher rate of return. In comparison to silver's 70% rise between May 2020 and May 2021, gold saw a growth of only 6.4%.
The silver price and the value of the dollar have historically been negatively correlated. When the dollars’ worth is high, silver prices often fall. When inflation is rising and the dollars’ worth is falling, the price of silver rises.
There are actually numerous methods to invest in silver, including actual coins and bars, ETFs, mutual funds, and even online investments.
- Silver Coins: There are pure silver bullion coins like American Eagles or Canadian Maple Leafs (which are 90% pure silver and available in different sizes like 1/2 Oz silver, 1/4 Oz, 1/10 Oz, 1/20 Oz, 2 Oz, 10 Oz, 100 Oz) if you're buying silver because you want a guaranteed return that includes inflation protection.
- Silver Bars: you can buy silver bars range in size from 100 gram silver (3.5 ounces) to 1 kilo silver (32 ounces). Each bar is composed of at least 99% pure silver and is stamped with an individual serial number.