With so much attention given to gold over the last few years, it is long past time to take a closer look at silver investment. If you are wondering, is silver a good investment, pay attention to this since it may be one of the biggest opportunities. The price of this overlooked cousin of gold has been quietly performing virtual miracles. Investments in all kinds of silver assets, from physical silver to exchange-traded funds, are becoming increasingly popular, as interest in gold seems to have kept the focus off silver investing opportunities. Regardless of the opportunity regarding which precious metal you choose to invest in, there are certain facts that remain. You need to hedge against inflation and a weakening currency. Take action today to discover how to invest in precious metals.
Investing in Silver
Do not be fooled by the much lower unit value for silver. Low prices mean a lot of potential upside for an asset. You have already learned this if you were smart enough to get in on silver when it was worth $4 per ounce in 2001. If you were not aware of this, consider the roughly $30 spot price of silver at the end of 2012 and do a little calculating. An investment of $30,000 would have been worth $225,000. Those are some serious gains for any investment over an eleven-year period. Don’t underestimate the potential that exists – that is why silver is a good investment, even more so in the climate of devalued currencies and inflation. Past performance is a great motivator, but it is not enough to convince smart investors to buy. Investments can hit walls and bounce back. Many people think that gold has become so expensive that it cannot move any farther ahead, no matter what happens. Has silver done the same?
Gold vs. Silver
If you are wondering why is silver is a good investment, then you need to compare it to gold. Throughout modern history, gold has mostly maintained a ratio with silver of about 15 to one. The exact numbers in use will differ depending on the person with whom you speak and the data that they use to determine this ratio. Nevertheless, most will agree on a price ratio somewhere near that range. Silver and gold have not adhered religiously to this ratio. They have strayed pretty far from it at times. Sometimes, silver has been reduced to nearly 1% of the value of gold. Silver and gold always seem to return to their normal ratio, though. Knowing this fact has brought a lot of people’s attention to silver investments right now. Even in 2001, when both silver and gold were valued at remarkably low prices, the value of silver was still less than 2% than the value of gold. It had a lot of catching up to do in order to reach the 6% or 7% that has been historically normal. Given the way that gold has performed since then, you would think that silver had been left far behind. Yet silver has gained. Presently, though, silver is still only valued at about half the price that you would expect. Hopeful silver investors are putting their money in silver assets and hoping to see their money possibly double as silver returns to its normal price ratio with gold.
The Wisdom of Silver Investments
There is much more than historical circumstances supporting silver’s potential gains. This precious metal shares many of the qualities that make gold so important in modern industry. Both are used in electric and electronic devices to form the most delicate parts of contacts and connections. Electronics are only becoming more and more important as developing nations begin to acquire all those gadgets and devices that higher-income countries have enjoyed for so long. This adds additional pressure to the upward climb of silver spot prices.
Buying Silver for Retirement
Since the forward movement of silver prices looks very possible, investing in silver IRAs may be the best retirement move that you could make right now. Certain custodians of IRAs allow their clients to direct investments into specific precious metal assets. They allow both physical purchases of silver and indirect investment through stocks and exchange-traded funds. You can guarantee a solid foundation for your retirement with a silver IRA, mixed with other precious metals. If you are stuck in a 401k, you do not need to sit and watch in frustration as other retirement investors make silver investments their number-one priority. A 401k rollover into silver IRA investments is easy. All you have to do is locate a silver IRA custodian who is willing to accommodate your silver investment wishes before letting your 401k administrator know that you want to make a rollover. Make sure that your 401k writes a check to your new IRA custodian and not to you. If it appears that you made a withdrawal of funds rather than a rollover of 401k to silver IRA, then the government could hit you with some big taxes.
Types of Silver Investment
Whether you are in silver for retirement purposes or just as a part of your overall trading portfolio, you should be aware of all your options. You can invest in silver in many different ways. Physical purchases are always popular. However, given the lower value of silver by the ounce, you can get stuck with a lot of storage responsibility when you buy silver coins or silver bullion in bar form. It still might be worth a look combined with gold.
You can also buy collectible coins. These are silver coins that are out of circulation, such as the Morgan Dollar. Some of these silver investment options are really out of circulation because they are from shipwrecks or from governments that do not exist anymore.
The problem with these purchases is that it is hard to know how much they are worth. When you buy an American Silver Eagle, you can follow trustworthy charts that display the current spot price and the asset price. With collectibles, you have to do more research to verify why you would pay the requested price. Their is also the option of silver bullion bars that you can buy directly from your IRA account and have it transferred to a custodian.
That is why many people prefer to buy stocks and ETFs to distance themselves from the asset itself. This gives them some exposure to silver without having to bear the burden of storage and maintenance costs. However, there is a cost for all services, physical or not. ETFs are particularly attractive because they frequently invest in physical quantities of silver and then sell shares to the fund. These ETFs are superior to most index funds that do the same thing because ETF shares act more like stocks. You can buy and sell them all day rather than wait until the close of business. So a silver ITF is one option.
Best Way to Buy Silver Bullion, Stocks and ETFs
The best pace to buy silver coins is through any licensed distributor that buys directly from the US government. The US Mint strikes millions of American Silver Eagles during the course of a year and sells them in big lots to these distributors. Unless you have the money to buy the minimum 25,000 coins straight from the mint, then you will need to buy from a distributor who is willing to sell silver coins in smaller quantities. The best place to buy silver bullion in bar form is through reputable sellers. They should make smaller bars available because you do not want to buy a 100-ounce bar and struggle trying to liquidate it later. Some silver vendors sell bars as small as 10 ounces in size. You can go through almost any broker to buy silver mining stocks and silver ETFs. The latter option has become increasingly popular. You will not have a problem selling a silver ETF if you need to do so in the future. Is silver a good investment idea? It may not be just a good idea, but one of the best decisions you made together with other precious metal investments. None other than Jim Rogers, the investor who called the sub-prime mortgage disaster ahead of time in 2007, is heavily invested in silver ETFs, and physical silver and gold. With that kind of recommendation, it is hard to resist silver investment. In the present financial environment it is crucial to have inflation protection in place while guarding against devalued world currencies.