Buy Silver And Diversify Your Assets

date_range

8/12/2016

We live in interesting times. The stock market is at all-time highs while bonds are on the verge of offering negative rates. There is social unrest as we enter the final stages of this presidential election. We're more divided than ever socially and economically, and terrorism is a world-wide phenomenon including events unfolding right here on the streets of American cities.

Today, as an investor, it's more important than ever to protect your assets while you continue to grow them. Asset diversification is a smart strategy to achieve exactly these goals. A well-diversified portfolio should include stocks, bonds, real estate, and other tangible assets like precious metals.

Among the precious metals, silver offers affordability, liquidity, portability, and has strong industrial demand creating a built-in market. Among the precious metals during the last bull run, the percentage gains for silver far outpaced the percentage gains among gold, platinum, and palladium. Today, silver prices have fallen below the cost of production making it an extremely smart buy. Any asset that falls below the price of production is a buying opportunity!

The Case For Investing in Silver

Silver offers many benefits to the investor. Long considered a “gateway” investment into the precious metals market due in no small part to its affordability. Using traditional investing guidelines, the time to buy any investment is when it has stopped going down. Gold and silver have retracted around 50% from their highs and this is a classic indicator that it may be time to buy. This is only one of the many reasons that now may a great time to buy silver.

Above-ground inventories of silver have been in steady decline over the past decade or so. Currently, the per-ounce price of silver is below the cost to extract new stock from the underground. Companies have cut production because it is not financially feasible at this time. Additionally, most of the world's mineable silver exists in countries that suffer from unpredictable political turmoil and social unrest like Mexico and Peru. Currently, industrial use is growing. Silver is used across many industries including the automotive, technology, solar energy, and medical industries. Computers, tablets, and cell phones all use small amounts of silver in their manufacture. Silver is the most conductive of the metals and its antibacterial properties make it highly useful in medical applications. As technology and new medical uses continue to evolve and grow, silver demand will continue to rise.

Silver is also a tangible asset and acts as a store of value. Unlike stocks and other paper assets, which can become worthless, silver has never and will never be worth “zero”. In times of political and social unrest, currency devaluations, and economic turmoil, silver can act as an “insurance” policy for your investments. The same factors that can cause stocks to crash, tend to increase the price of precious metals. In today's uncertain times of social unrest, terrorism, and extreme economic fluctuations (think Brexit) silver can give investors peace of mind and the opportunity for big gains.

How To Invest In Silver

Silver is available as a “paper investment” in the form of silver mining stocks and EFTs. In the event of economic turmoil, these may not be accessible. The best way to invest in silver is to buy the physical metal and take possession of your asset at the time of sale. Silver bullion is available in the form of coins issued by governments, “rounds” which are coins minted by third-party companies, bars, and as pre-1964 US coins also know as “junk” silver. Let's look at each of these.

Coins – Many governments mint silver bullion coins like the US Silver Eagle or the Canadian Maple Leaf. These weigh one troy ounce and are minted in .999 fine silver. Coins are priced based on the daily spot price of silver and carry a buyer's premium over that price. Coins are backed by the full faith in the minting government.
Rounds – Rounds are almost identical to coins. They are also one troy ounce in weight and .999 fine. The main difference is that “rounds” are not legal tender and are produced by third parties. Buy Silver rounds at U.S. Coins and Jewelry.
Bullion Bars – Bullion bars are also produced by third parties. Bars are available in a wide range of weights with the 1, 5, 10, and 100 ounce sizes being the most popular. Bars are available in weights up to 1000 ounces and generally carry a slightly lower premium per ounce than coins or rounds. Buy Silver bullion bars at U.S. Coins and Jewelry.
Bags of Junk Silver – Prior to 1964, the US mint produced silver dimes, quarters and half dollars. Junk silver comes in $500 and $1000 “face value” bags and consists of pre-1964 silver coins. Bags are priced based on the daily spot price and on weight and silver content along with a buyer's premium.

Because of silver's affordable price of entry, a good strategy is to purchase a fixed amount weekly or monthly to add to your asset portfolio. Physical silver can also be held in a precious metals IRA. The best solution is to work with a reputable dealer to purchase your silver. They can advise you as to the best form to purchase as well as set up a buying plan. They will also be able to help you with any questions you may have about investing in silver for your IRA.