Many valuable metals are great alternative investments to traditional stocks and bonds. And out of all these precious metals, gold is always considered the best venture. But what about silver?
Have you ever considered investing in what people call the “poor man’s gold?” Indeed, this metal is always second to gold, but its value and potential cannot be denied. Currently, its prices play at around $23 per ounce. But did you know that in the 70s, the highest price was achieved at $48.70 per ounce?
While prices change constantly, it is expected to rise in the coming years. And investors are getting excited about the possibilities.
If you’re still having second thoughts about investing in the poor man’s gold, be convinced with the following reasons.
Why Invest in it?
The metal that signifies second place is considered a cheaper alternative to gold. However, it has been known to outperform its yellow-coloured rival. And here are more reasons why you should start investing in this precious metal.
- It is a commodity. It is considered an economic good. And it is something that can be interchanged with other goods from the same category. Investors usually turn to the poor man’s gold when the stock market is falling since the movement of commodities is inversely proportional to that of stocks.
- It acts as a hedge against inflation. While it can be bought, sold and traded, many investors hold on to it as a haven. Its qualities, which are valuable in many electronic and technological applications, give the gold’s cousin more worth than just being an investment. Thus, it retains, if not gains, its prices even in the long run.
- It is real money. Although not literally, it is also considered money since it is a hard asset used in place of currencies. And it is something with value that you can hold, unlike paper currencies.
How to Invest in it?
There are several ways of investing in it, and they come with their pros and cons. Thus, you need to assess which way will work best for you carefully.
- Physical coins. It comes in coins or bullions. You have the sole responsibility of keeping it safe, but you can use it whenever needed. Just be sure to pay the right price since some sellers are known to sell their stash more than their worth.
- ETFs. An exchange-traded fund that owns this valuable metal is one way of investing in it without actually owning it. This eliminates the risk of theft, but it also gives you the chance of getting physical silver once prices increase.
- Stocks. Investing in stocks of companies that mine the poor man’s gold allows you to earn more when their prices increase and when the company increases its metal production. However, you need to do a lot of research before investing in a silver-mining company and make sure it is reputable.
- Silver Futures. Owning precious metal in the future through a “silver futures” contract is an excellent way of investing in it without having it in your hands. Because of this, you can own a lot with small capital. But there’s also the risk of losing your investment when its future goes down.
Venturing into precious metals is a great option if you want an alternative to the traditional way of investing. And it is one of the most promising metals to place your money on. Even seasoned investors are betting on it despite not having a crystal-clear future.
Once you understand how it works and its advantages against other investments, you will surely appreciate it and start capitalising on it.