Pros and Cons of Silver Investments

Silver is sometimes known as poor man’s gold but the way its price has elevated in recent months, it may actually be the metal of choice for the savvy investor who is after the largest returns.  The last real boom in silver happened as far back as 1980, and today’s price is starting to match those levels – certainly worth keeping an eye on!  With an increase of 31% in August – September, 2010 – the surprising increase trebled that of golds.  With the global economy on the rebound, the demand for silver should increase with the precious commodity being heavily used in computer components, the solar industry and in jewellery items – all set to increase in sales as the financial world regains its confidence once more.  Still, it pays to have a certain working knowledge of how the world’s silver market operates and to keep a sharp eye on any fluctuations in price before beginning a serious investment strategy.

Pros of investing in silver:

Firstly, silver is a lot cheaper than gold – generally considered to be the #1 investment metal.  The price to purchase usually follows the trends that gold is setting in the market – whether going up or down.  The price increase of silver in a bull market tends to outstrip other precious metals, such as gold, platinum and palladium; silver has been known to triple in price and outstrip the increase in gains of other commodities.  Silver is in high demand for industrial reasons and is used widely in many of the newer technological ventures that are emerging on the global scene.  Investing in silver is a great way for investors to diversify their portfolios and add to their overall wealth; many financial experts predict that it will be one of the growth areas in future markets and has incredible potential as an investment commodity.  The sale of silver coins in 2010 is setting records in the market and this trend seems to be indicating that demand for the metal will continue to grow and expand.

Cons of silver investments:

Unlike stocks, silver won’t pay the investor a dividend and therefore does not have a secondary income stream linked to it.  Real estate investments likewise can earn a second revenue source through rentals and add to the increasing wealth of the speculator.  Investments in silver have to be paid in cash and leveraged money options are not easily available like when investing in real estate and the stock market.  The security of precious metals can be a troubling factor too – the investor must make sure that their investment is safe from theft and needs a secure vault or similar place to have it stored.  The value of precious metals like silver and gold are usually moving in an upwards direction when currencies – paper money – are being devalued.  Some of their worth will be devalued by a falling currency and may make the investment a less attractive one.