Is silver a great investment? The answer is yes. Like gold, silver is really a safe investment that offers a highly effective hedge against inflation and adverse economic conditions, apart from wealth creation. Unlike fiat currencies, the value of silver does not fall in real terms with time. However, prior to deciding on how to purchase silver or where you can buy silver, you need to know why to purchase silver. Heres a look at the benefits and drawbacks of silver investing:
Advantages
Returns. Though silver is nearly 17 times more rich in nature than gold, it is more scarce in circulation. According to some estimates, the combined sovereign gold holdings by various treasuries on the planet tend to be more than the total mined silver available. Historically, silver has outperformed gold when it comes to returns which is truer these days than in the past. Over the last 2 decades, the returns on silver happen to be almost three times those of gold. Since 2009, silver price has grown 87% with over 630% returns, while gold price increased 30% with over 250% returns.
Demand. The demand for silver isnt driven by economic condition alone. It has a large use in industry and in the past few years thats been the major factor for silvers price rally. Currently, nearly half of the total demand for silver is industrial. The majority of the silver that is used in industry cannot be extracted and recycled because of various reasons, implying that silver is being consumed in manufacturing. Such demand is likely to continue pushing silver higher later on.
Affordability. Referred to as poor mans gold, silver is a highly affordable rare metal for all practical purposes. The gold to silver ratio is one of the most watched metrics within the gold and silver area. This ratio has been fluctuating over years. Even at current silver peaks the ratio stands around 31, indicating that gold prices are around 31 times those of silver. Therefore, affordability coupled with returns makes silver a winning investment option.
Liquidity. Like gold, silver has high liquidity and it is easily traded in various forms around the globe. For long, silver was adopted as a currency around the planet and enjoys similar recognition to this day.
Alternatives. There are numerous kinds of investments in silver that you can choose as per the needs you have. Included in this are bullion coins, collectors coins, bars, silver rounds, jewelry, junk silver, scrape, mutual funds, Etfs (ETFs), futures, options, certificates, and silver accounts.
Disadvantages
Bulk. Due to its low pricing, an equivalent amount of purchase of silver is a lot heavier as well as more space for storage than gold. This adds to transportation, insurance and storage costs for silver.
Maintenance. Silver gets oxidized readily, losing its sheen to a blackened appearance. Some of the premium thats paid during the time of purchasing a bit of silver relates to its appearance. You may lose out on such premium in your tarnished holdings during the time of selling. Therefore, it is very important to retain your physical silver in pristine condition. Bullion coins and certain numismatic coins are often obtainable in protective cover that protects them from oxidation. However, silver bars are subjected and face a greater chance of tarnishing.
Taxation. Unlike gold, silver is subject to taxation in most of the nations, either as capital gains tax or as vat. The tax rates in various countries range from 7% and 22%.
Instrument-specific drawbacks. Individual types of silver investments have various kinds of disadvantages. For example, futures are susceptible to inherent riskiness from the metal and markets. Another example is jewelry, that is unprofitable because its price includes crafting charges that fetch no value at the time of sale.
For More Info About Sovereign Silver And also Sovereign Silver Review, Please Leave a Comment: http://sovereignsilver.org/
Source: http://australianpressreleases.com/why-to-invest-in-silver/
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