For thousands of years, silver has maintained a positive market demand as an investment, currency and store of value. Silver’s market demand is still dominated by bullion coins, industrial products and jewelry. This precious metal also features in the stocks exchange as a traded product.
Silver price in the stock market is mostly based on speculation. Supply and demand are the main causes of silver price changes and thus when compared to gold, silver is rather volatile.
Silver lists among the most traded precious metals. This commodity is a store of value, a way to counter inflation hedge and an added advantage towards protecting against other financial and economic crises.
Silver has an edge as an investment tool. The following are some of the contributing factors that enable silver as an investment to stand out.
The element property of silver adds value by giving it more industrial applicationsIt’s been in existence for thousands of years as a currency and medium of exchangeThe supply and demand categories for silver contribute to its unique characteristics.
There is a higher industrial demand for silver when compared to its biggest competitor, gold. Increased demand may categorize silver a risky investment due to possible economic slowdowns.
However, experts have indicated that industrial applications are increasing at a very high rate. This means that the susceptibility of a sluggish market will not cause negative effects on the commodity.
As a product that has been available over a period of more than 4 millennia, investment demand is still sky rocketing. New uses for silver are identified almost every day.
But this is not the case with supply; production companies are therefore facing serious challenges as they try to satisfy growing market volumes.
The good ole days of buying silver bars and coins are still alive and well. Of course, there are some advantages and disadvantages to buying physical sliver.
It’s easy – You can buy Sliver just like you would buy any other physical good online. In fact, you can even now buy it on Amazon
Peace of mind – You can go to bed easy knowing exactly where your Silver is stored. You don’t have to worry about technology meltdowns or outages.
It’s “cool” and impressive – It’s definitely cool to own physical Silver bars. It’s empowering to hold it in your hand and it’s also a topic that people find interesting to talk about.
It’s more costly – There are additional costs to buying physical silver. Firstly, there is the cost of shipping. Secondly, the cost to store it. Even if you’re storing in your house, you should buy a safe. Finally, the cost of insurance. Just like anything else valuable in your home; it should be insured against theft.
Possibility of theft – As mentioned above when you buy physical silver, there is a chance it gets stolen or misplaced.
It takes up valuable storage space – Granted, this may not be a big problem for most people. But if you’re keeping it in your home, you still have to find somewhere to store it. That’s less place available for your shoe collection!
In most cases, young investors on silver will be disinterested in owning physical coins and bullions. Precious metals are chosen for insurance purposes. ETFs as an option to invest on these metals may seem a lot easier and securer.
If you anticipate that the financial markets could come crashing down any time soon, the best silver to buy would be the physical form, bullions and coins. However, if your objective is to make some quick cash by calculating the daily spread changes, and anticipating the next trade, then perhaps investing on ETF’s would be the best way to go. There are three major categories of ETFs.