Sound Money Campaign is somewhat bullish on Silver. Silver is a remarkable metal that has remarkable investment opportunity. It is volatile like penny stocks but tangible like gold. The value of silver is somewhat determined by the value of gold and the value of the dollar, but it is also a very, in demand resource that is needed in industries like solar power, mobile technology, and even circuit boards. It has a very high melting temperature, which makes it perfect for things like cell phones, and transistors. The current market is very similar to the last time silver ascended to a lofty place. The 1970′s was a time that silver exploded in liquid pools of profit. Even those times were not without setbacks and market reformations. That is part of the excitement of silver as an investment. It is challenging.
Like gold, silver has a place in most portfolios. It is a finite mineral that is in demand, and that alone spells out long term investment opportunity. We have heard about peak gold, peak oil, and even peak water. At the rate of global industrialization silver will also reach a peak. Another factor to consider with silver is the Fed. How much longer can the Fed continue to buy bonds? That policy has a lot to do with how the dollar is valued. Right now, interest rates are so low that the value of the dollar is not worth much. There is an adage in investing that says, “the dollar of today is worth more than the dollar of tomorrow,” but in the current economic climate the dollar of today is not worth very much more than the dollar of tomorrow. Without higher interest rates, the dollar is at best going to remain flat, and at worst it is doing to devalue even further. Either way, precious metals, like physical silver, are going to continue to perform. Silver prices right now are down, and that makes a perfect opportunity for investors to add silver to their portfolio. The question is whether to add physical silver (bullion/coins) or silver stock/equities.
Silver Bullion
Physical silver is a good way to invest, but if you are planning on buying significant quantities of silver then you have to be prepared to protect it. Home safes, off site storage facilities, etc. all cost money and those costs are reflected in your profit. Sound Money Campaign does not recommend storing gold or silver in bank safety deposit boxes. The U.S. government seized gold once before, and the banks were a prime locale from which the government liquidated the people’s assets. So while physical silver is good, it can come with hidden costs.
Silver Equities
Silver equities are basically the same thing as buying stock in silver mining companies. The difference between physical silver and silver equities is that if the price of silver drops significantly you at least still have possession of the physical silver. A stock that is valued at zero dollars is just paper.
Silver prices are enticing right now, and silver seems to be deserving of a good hard look. Like any investment, there is a risk, but that risk can be mitigated by a solid strategic plan of investment. We encourage you to do your own research.