Many experts believe that smart investors are those who add precious metals to an investment portfolio. And there are many reasons to believe that is true. To begin with, silver has an intrinsic value and is widely considered a commodity and form of money. This stems from the fact that it was centuries ago as a medium of exchange.
In Article I, Section 10 of the US Constitution silver coins can be used legally as tender in the payment of debts. That said, silver also has unique characteristics that has made it a widely used product in medical, industrial, and telecom technologies. It is also an affordable precious metal as compared to gold, which makes for an ideal investment for the smaller investor.
To understand silver as an investment let’s take a look at the overall financial markets. The US stock market experiences some key patterns where the market increases and then there is a correction, which is, for the most part, a predictable pattern. It’s the timing of these corrections that is hard to predict, and which is why the stock market is risky. Lots of risks can bring plenty of rewards or a serious loss of your net worth. However, you don’t have to be in the market completely unprotected if you have precious metals like silver coins in your portfolio.
Silver coins can potentially keep your investment safe no matter how or when a market correction takes place. Silver helps position your assets in a way that you can benefit from market corrections where stocks may be in a downward spiral but silver prices will end up going higher. In fact, there is fantastic potential to make money in a downturn as long as you have silver in your investment portfolio.
Benefits of silver investments
While paper money has value only just because the US government says so, precious metals have an intrinsic value. Paper money could lose its value when people lose trust in the government that backs the paper. However, silver coins will always retain its role as a store of value.
Silver as a hedging tool against inflation
Silver also makes for a fantastic hedging tool against inflation, which is in actuality a depreciation of the value of money. Potentially every dollar or other currency you own in your bank account could depreciate in value. This is evident from its purchasing power.
What you could purchase with a dollar say ten years ago you could no longer do so now. That’s inflation for you. It eats into your money. However, silver doesn’t lose its shimmer with inflation. Precious metals tend to rise during inflation.
Demand for jewelry
While diamonds may be considered a girl’s best friend, silver jewelry has been in demand throughout history. And it is an affordable jewelry alternative as compared to gold considering its lower price and the fact that more people have access to it means the demand is much greater. This is why silver coins could potentially become a viable investment. They can be melted down and converted to any type of item for jewelry or even industrial purposes and vice versa.
High investment value of silver coins
Buying silver coins increases the chance of making money since they have their own intrinsic value. They have marvelous collector’s value and can appreciate with time just like any other collector’s item. Old silver coins are worth a tidy sum on a weight basis as compared to the base metal they contain. In effect, you basically invest in the base value of the metal and in the collector’s value of the coins.
There is no doubt that the demand for silver in industries continues to grow. It is needed for many industrial processes, which is why it is likely to retain its value in the future. In fact, silver is used in many more industrial items than gold. It will therefore still remain in demand even if its use in jewelry declines or it is stripped of its historical role as a store of value.
Silver retains its value in a financial crisis
It is no secret that investors flock to precious metals when there is a financial crisis, market downturn, or when there are fears of a debilitating economy or political instability. Silver coins offer outstanding liquidity and can be easily sold in the market. It also makes for a splendid investment when paper money loses its value.
Investing in silver also helps position yourself to benefit from market recoveries. It helps you stay liquid to invest in other unique market opportunities. In addition, it’s a salient way to boost your retirement funds. You can add silver to your IRA. If you have a 401(k) retirement account you can roll over these funds to a traditional IRA and then start adding silver to it.