Silver vs. Gold: Which Is The Better Investment?

Silver vs. Gold: Which Is The Better Investment?

When you think about precious metals to invest in, the two that typically come to mind for most people are gold and silver. Gold is often discussed as a great investment, but there are hidden benefits of adding silver to your portfolio as well. If you’ve already invested in gold, or are looking to start a precious metals portfolio, here’s why you should consider silver.

Silver is more affordable than gold. 

One of the biggest benefits of investing in silver is that the financial barrier to entry is much lower than investing in gold. The average price for an ounce of silver as of December 2020 is about $24. The same amount of gold would cost $1,840. For those looking to invest in precious metals with a limited budget, it’s a no-brainer - you can invest in much larger quantities without the sticker shock. 

The price of silver is steadily increasing. 

Although silver may be much more affordable than gold, there’s still plenty of financial benefit to investing in this exciting metal. Throughout 2020, the price of silver has gone up steadily, and experts anticipate that this growth will continue.  

There are a few reasons why silver prices have gone up this year. The first is that silver always performs well during an economic crisis - making it a great investment regardless of the economic climate. Because it is a physical commodity, it cannot lose value the way that stocks can. Because of this, many investors turned to silver this year to bolster their portfolios. With general economic uncertainty likely to continue into 2021, this could drive silver prices up even further. 

Additionally, many experts think that silver is still dramatically undervalued, particularly when compared to gold. Because of this, silver prices could continue going up long after the pandemic until prices are more reflective of silver’s true value.  

The price of silver is more volatile than the price of gold, which means that there is technically more financial risk. However, the price of silver is tied more closely to the performance of the stock market, which means that you can use traditional economic indicators to make your investment decisions.

Silver is in demand throughout the world. 

Although gold may be far more expensive, silver is very versatile in terms of how it can be used. There’s currently huge global demand for silver throughout the world, and that is likely to stay steady or even increase in the future. 

Silver has long been used to make ornate jewelry or tableware, but it also has many uses in technology. This is because silver has a very high level of electrical conductivity and is very reflective. It’s currently used for many different types of batteries as well as solar panels. It’s also used in computers and other electronics. 

Because silver is used in many different types of modern technology, prices are likely to continue to go up over time. We’re only beginning to scratch the surface of how we can use silver in modern technology. 

Silver is not a digital asset. 

Because silver is a physical commodity, it has some unique advantages that you wouldn’t get from many other forms of investment, such as stocks, mutual funds, and bonds. Because silver is not a digital asset, it inherently cannot fully lose its value. This makes it more secure than a stock, for example, which can fully lose its value in a particularly dire economic climate. 

Silver’s status as a physical commodity also makes it more secure. Digital assets are vulnerable to hackers and other cybercriminals in a way that silver isn’t. Silver is also a very private investment - there are plenty of ways to buy it without any public digital record of the transaction. This makes it a good option for those who want to minimize their digital footprint. 

Of course, silver can still be physically stolen, so you’ll need to make sure that your investments are stored securely to prevent problems. There are many reputable companies that provide secure storage for precious metals and other physical investments. Silver generally does not require ongoing maintenance either, so once you have found secure storage for it, you won’t have to worry about it. 

Silver can serve as a form of legal tender. 

Historically, silver has been used as a form of currency, and that can still be true today. Rules surrounding currencies will depend on where you live. It never hurts to have silver on hand to use for this purpose, especially because its value is recognized internationally. 

Is silver better than gold? 

While there are many benefits to investing in silver, there are some areas where gold has the advantage. For example, gold is much less volatile than silver, so the prices don’t fluctuate as dramatically. This is a key consideration if you’re worried about the market’s movement over time.

In the end, which metal you choose will come down to your personal financial situation and risk tolerance. Right now, silver prices are on a strong upward trajectory, and they are also much more affordable than gold. For many, this makes silver a better investment. However, you may also want to consider having a balanced portfolio with both gold and silver. This way, you can enjoy the financial advantages of both metals while minimizing some of the financial risk. 

How To Invest In Silver

There are a few different ways to invest in silver and take advantage of the exciting financial benefits this precious metal has to offer. Each investment strategy has its own advantages and disadvantages, so you’ll want to weight these carefully to see what makes the most sense for your own investment goals. Luckily, you don’t need to be an expert to invest in silver - you just need to be willing to do some research and determine which type of silver is best for you. 

One of the most popular ways to buy silver is by purchasing physical coins or bars of silver. To do this securely, you’ll need to go through a reputable dealer. When searching for a dealer, talk with several different people and ask about their pricing and their experience. Comparing your options will help ensure that you get the best possible deal on your metals. You should also look for dealers with industry certifications to ensure credibility. Once you’ve made your purchase, be sure to keep in touch with your dealer, as you’ll need their help again when it’s time to sell the silver in the future. 

When buying physical silver, bullion bars tend to be the most stable in terms of pricing. However, coins can be worth more due to their history or rarity. Before investing, take the time to explore many different types of silver and see which one makes the most sense for you. You will also need to find a secure way to store your investments. Reputable depository storage systems are generally the best option for this, especially if you are making a large investment. Smaller quantities may be stored in a home safe if you are more comfortable with that. You can even use them as part of your legal IRA contributions if you follow strict storage regulations set out by the IRS. 

Those who aren’t ready to invest in physical silver can purchase silver ETFs, or exchange traded funds. ETFs are essentially a collection of stocks tied to a specific industry, in this case silver. When silver prices move as a whole, your silver ETFs price will rise or fall as well. The largest silver ETF is the iShares Silver Trust, but there are many others to consider as well. Since ETFs are inherently diverse, there’s less financial risk than spending that money on one individual stock. 

You could also consider purchasing stocks that are tied to the silver industry. This could include stocks of companies that mine for silver, or companies that are involved in silver refinement and production. One unique advantage of investing in stocks is that they can pay dividends over time. However, stocks are much more volatile than simply purchasing the metal itself. 

Experienced investors may also want to consider trading options or trading futures with silver stocks. These investments are limited by pricing and dates and are more complex than investing in the stock market or in physical silver. However, savvy investors who follow the market carefully can really benefit from trading this way. 

Overall, silver is a great investment, and it’s often overlooked when compared to gold. However, you shouldn’t skip this precious metal when building your investment portfolio. It has so much potential to grow in the future, and its affordable pricing makes it easy to start a position.

If you’ve already invested in gold, consider adding some silver to balance out your portfolio with one of our silver investment lots.

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