In 1998, Warren Buffett famously purchased 129.7 million ounces of silver for his company Berkshire Hathaway. Buffet is one of the most successful investors in the world, so if he thinks buying silver is worthwhile, you probably should, too. There are indeed many benefits to buying silver, and especially to buying silver right now, as the silver market appears destined for a rebound.
Silver Investments | FAQ
1. What Is Silver?
Silver is a soft, white, natural metal that has the highest electrical conductivity, thermal conductivity and reflectivity of any metal. Its chemical element is “Ag.” It can be mined out of the Earth’s crust, though it is usually found within other metals, like gold, copper and zinc. In its purest state, it is called “native silver.” The precious metal has been used as currency for thousands of years, but also has thousands of modern industrial applications, as silver has been found to work well in everything from solar panels to jewelry to X-ray photography.
2. Can You Use Silver As Legal Tender?
3. Where Can You Buy Silver?
Silver may be a precious metal, but it is easy for the average U.S. citizen to buy. You can buy silver coins or bullion and certificates online, or from a local dealer or antique shop. Silver, of course, is used in many products and can come in many forms, such as jewelry and silverware. So, if you consider that, you can buy silver from almost anywhere.
4. What Does Spot Mean When Buying Silver?
The spot price just means the current price for one ounce of silver. It is the price you would pay “right now on the spot” to get it delivered to you. Buying silver at spot price is easiest to do in-0person at a reputable dealer.
5. What Is the Highest Price Silver Has Been?
In 2011, silver prices reached an all-time high of $50 an ounce.
How We Reviewed
We reviewed thousands of years of silver and gold history, and compared how those two precious metals have performed over the past century in the United States and the world so we could determine the top benefits of buying silver and provide you with some recommendations.
Historical Price Range of Silver
Silver has long been seen as an investment. Prices of it have been well-documented over the past century. In 1915, an ounce of silver cost around $10 and today it is closer to $15 and rising. In 2011, silver prices hit a peak of $50 per ounce. (In comparison, gold currently costs around $1,000 an ounce.)
Let’s Take at the Benefits of Silver
Owning silver gives you a tried-and-true currency
- Silver can offer protection
- Gold is close to a major breakout (in price,) and that will filter down to silver
- Investing in silver coins and bullion is a favorable way to hedge against inflation
- Silver coins are, have been and will continue to be popular
- Physical silver is a hard asset
- It’s cheaper than gold
- The Time Is Right for Buying Silver
- There’s always a demand for silver
- Silver outperforms gold in bull markets
Owning Silver Gives You a Tried-and-True Currency
Silver coins were in use as long ago as 600 B.C., and nearly every major empire since, from the Greeks to the Romans, has considered silver to be a convenient form of currency. In fact, the Roman word for banker, “argentarius,” translates to “silver trader.”
Silver was also a popular ingredient in ancient jewelry, figurines, tableware, crafts and other useful and aesthetically pleasing objects.
Ancient silver currency did not always come in the form of coins. Before coins were widely adopted as currency, many civilizations, like the Vikings and the Egyptians, relied on hack silver, or fragments of bent or cut silver, which they sometimes buried and stored underground. Unlike the modern-day U.S. dollar bill or digital bitcoin, silver is so old we don’t even know who first discovered it.
Silver Can Offer Protection
Unlike digital currency or your stocks and bonds portfolio, silver is a hard, physical asset. And although it is like paper currency in that you can hold it in your hands, it is far more useful, with more than 3,000 industrial applications.
This precious, white metal is found in everything from cell phones to deodorant to batteries to mirrors. It is hardly just a pretty coin or piece of jewelry with a perceived value, but an amazing natural metal that has come in handy throughout ancient times and through the industrialized times of today.
This means that silver always has value and can always be sold or traded, no matter how dire or unpredictable the economy. Silver is not disturbed by government politics, random inflation, unpredictable cultural trends or the swings of the stock market. Consequently, silver offers you financial protection in good times and in bad. It is always a reliable form of currency.
Gold Is Very Close to a Major Breakout (in Price), and That Will Filter Down to Silver
It is predicted that over the next year, the demand for silver will rise dramatically, following the same trend as gold. The silver market, like any other market, fluctuates over time. It is due for a major rebound, as the last peak in silver prices was a few years ago in 2011.
Gold may be the more well-known and popular commodity between the two, but whatever the gold market does is also reflected in the silver market a short time afterward. Since gold is estimated to be just 3% away from hitting its breakout price, many are confident that silver is also not far behind and so silver is the metal to buy right now in 2018.
Investing in Silver Coins and Bullion Is a Favorable Way to Hedge against Inflation
Although many metals, like copper and platinum, can be made use of and also bought, sold and bartered for, they can’t also be used as easy, everyday currency.
The purchasing power of both silver and gold has remained stable over thousands of years, and most modern-day shop clerks recognize the intrinsic value of these precious metals. So, a collection of silver coins or bars will give you much more than bragging rights.
America has seen many economic hard times, from the Great Depression of the 1920s and 1930s to the high inflation era of the 1970s and 1980s. During stock market crashes and other economically rocky times, silver coins and bullion prices remained steady and proved to be a smart hedge against inflation.
The worst way to buy silver is to buy silver certificates, however, as they provide no tangible value. The fact that you can physically hold a silver coin or bar is what guarantees you the metal’s high value.
Silver Coins Are, Have Been and Will Continue to Be Popular
The important thing to keep in mind when buying silver is that there isn’t just one kind of silver.
An investor may look into “junk silver,” which is about 90% of silver U.S. coins made before 1964 — dimes, quarters and half dollars — that have a clear and straightforward face value.
On the other hand, individual collectible coins, while fun to purchase, come with some risk as they can have high premiums and low silver content. Coin collecting goes back to ancient times, and for good reason. Many people enjoy numismatics if they are patient and methodical, because it can pay off significantly in the long run.
Buying silver bars and bullion gives you a clear weight and purity of the silver you own, so they hold great ongoing value.
Physical Silver Is a Hard Asset
While it’s possible to buy silver on paper, i.e. silver certificates, we do not recommend that. The real value of silver comes from the fact it is real. It not only has a tangible, physical form, but is a natural metal that has a real use in the real world.
No matter what the stock market or your bank or your neighbor does, you can trust that your personal stockpile of silver is always there for you, and you can save it, sell it, or trade it at will.
There is one risk of owning physical silver, however, and that is it could be lost or stolen. As long as you take the proper steps to store your silver coins, bars, and other items securely, you can feel great about your very sound investment.
It’s Cheaper than Gold
Gold has many of the same benefits of silver, in that it offers you a tangible, hard asset, however everyone knows gold is worth more. Therefore, gold costs significantly more as an investment.
On average, silver bullion is worth around 1/79th the price of gold! Because it is so affordable in comparison to gold, silver is often considered a “gateway investment.” (For those on an especially tight budget, junk silver is a great option because it can be purchased in small qualities and has a clear face value.)
One of the reasons buying silver is so affordable now is because people often overlook the metal’s value as both a useful industrial metal and tried-and-true form of currency. That keeps the market fairly small and easy to buy in to. As a result, silver is somewhat of a well-kept secret in the investment world, as the public does not yet consider silver to be a “go-to” investment.
The fact that so many people are still missing out on the impressive purchasing power of silver means those who take the leap into buying silver today will be well-rewarded tomorrow.
The Time Is Right for Buying Silver
According to many financial experts, now is a ripe time to invest in silver. That is because both gold and silver are in a “bear super-cycle” market that is not expected to end for another several years.
The price of gold and silver peaked in 2011 (gold hit $1,900 per ounce and silver hit $50 per ounce) and they have been on a natural decline ever since. What makes silver a unique investment over gold is its lower price. In addition to its lower barrier to entry and risk, silver mining production has been lower than average in recent years.
Despite these factors, the demand for silver should only increase over the next decade, thanks to the real needs of modern-day society. Silver is used in thousands of products, including trendier ones of the 21st century like solar panels and cell phones. That’s why it’s always a good time to invest in silver, but now is an especially auspicious time.
There’s Always a Demand for Silver
Silver is used in thousands of products. While it’s easy to imagine a collectible silver coin or necklace, there is unseen silver just about everywhere. The rare, finite precious metal is necessary for making all kinds of important and everyday products and that means that silver is never going away. Neither is the demand for it.
Silver is special because it is the most conductive metal of all, which makes it a go-to for many manufacturers. Some examples products that require silver are solar panels, cell phones, a wide variety of electronics, non-digital and X-ray photography, mirrors, glass, tableware, car engines and even medical devices and more. That’s not to mention the large population of silver coin-collecting enthusiasts who are fully invested in the precious metal.
Silver Outperforms Gold in Bull Markets
In a bull market, gold and silver prices go up. It is predicted that gold and silver are both about to enter into an optimistic bull market, after a long bear market of sideways prices, Forecasters also predict that silver will eventually outperform gold.
Silver mining production has been down since 2016, and so this is setting up an auspicious supply and demand scenario for the precious white metal. Because silver bullion is so much cheaper than gold, the gains are much higher when prices go up. According to GoldSilver, from 2008 to 2011, silver gained 448 percent, while gold gained 166 percent. This trend is expected to continue.
Silver is one of the safest investments a person can make, and since it is so much cheaper than gold, it is an investment that almost anyone can make.
In addition to it being easier to invest in, leading financial experts believe that now is as good a time as any for buying silver because good things are about to happen.
If buying silver is something you’ve been on the fence about, recent gold and silver trends ought to push you over the edge and make you a silver investor. Ultimately, when the prices break out, silver will outperform gold, making it the better investment.
Just be careful to avoid intangible silver certificates and instead invest in hard physical silver bullion that will be there for you through thick and thin financial times.