Silver Facts You Need to Know Before Investing
Considering investing in silver? Make sure you keep the following tips and facts in mind, whether you’re a novice or a seasoned pro.
Gold may be the flashier of the two leading precious metals, but silver is an incredibly smart investment choice for individuals who understand the intrinsic benefits of leveraging tangible resources that will always have value. Keep these concepts in mind if you’re considering investing in silver:
- Silver is everything to industry: Yes, gold is used across a variety of industries and certainly has a home in the technology field, but silver is used in hospitals, automotive plants, new home building (solar panels and technological implements), batteries, jewelry, dental appliances and more. The demand for silver is growing rapidly, with 2015 registering nearly 970 million Troy ounces of the metal being used, versus 375 million just 30 years before.
What this means: Silver isn’t reused as efficiently as gold (it isn’t worth recovering small pieces of used silver, unlike gold) – and that means demand for new silver is usually strong. Also, since our growing global population is likely to be more concerned with technology than accumulating jewelry, the demand for silver should remain quite strong.
- The silver market is smaller than the gold market: So why would this be important? If you look at the annual supply of silver and multiply that by an average price of $15 an ounce, that works out to a market capitalization of about $14.5 billion. Compare that to gold, which has a market cap of about $82 billion.
What this means: Silver often moves around much more frenetically than gold, which can be eye-opening for those accustomed to gold’s relative stability. But this does give the profit-conscious investor a bit of a wilder rollercoaster to ride, and that can make quickly growing a portfolio a reality. The trick is not to get nervous if silver takes a dip, it is likely to rebound quickly.
- Silver is cheaper per ounce: Silver is about 75 times cheaper to buy and hold than gold, which in itself doesn’t really mean a whole lot in a financial sense. A common ratio used by precious metals is the gold-to-silver ratio, or the ratio between the prices of these two metals. It has fluctuated quite a bit over the years, but silver is inherently cheaper.
What this means: More tangible silver can be purchased than gold, and that does seem to have a positive mental benefit for some investors. $1,240 may buy a one-ounce gold coin in July of 2017, or it can buy 76 Troy ounces of silver – that’s a big difference.
Investing in silver by creating a silver-IRA account can deliver several key benefits for today’s smart investor. Silver can create rapid portfolio growth (and as such, should comprise slightly less on the balance sheet than gold’s share of the portfolio), it can be affordable to work with, and it is a tangible asset that is used across dozens of industries – creating serious value beyond your investment portfolio. For more information about precious metals investing, including gold and silver IRAs, contact American Bullion today.
Although the information in this commentary has been obtained from sources believed to be reliable, American Bullion does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. American Bullion will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.