Why You Have to Consider Silver in Your Portfolio
Benefits of Silver
Moving into True Money
Would you convert your labor into Depreciating Fiat Paper or into an appreciating tangible asset with intrinsic value?
Silver offers the opportunity to move into true money, an actual store of value, with the potential for substantial gains in future years as its current cycle continues. Protect yourself and your family by acquiring silver with intrinsic value and insulate yourself from the wealth destructive policies of central bankers.
The Paper Funds Exposed
While futures pricing manipulation gives institutional banks a means for price suppression, the ETFs and other paper derivatives have now involved the public in these mechanisms. These instruments funnel demand away from what would be geared as deliverable silver and into non-redeemable paper in the form of a prospectus or stock certificate.
The Common Man's Gold
The acquisition of silver is much more attainable for global populations compared to gold. As silver prices continue to rise, investor’s will further shift away from real estate, stocks, and bonds.
The affordability of silver is poised to make it "common man's gold" as it begins to make news and involvement becomes widespread.
Emerging World Demand
China and India represent two behemoth markets where populations have shown a tremendous appetite for gold and silver. An awakening of emerging market investment demand will contribute to a new demand dynamic for physical silver bullion.
Supportive of the monetary aspects are some of the largest untapped markets for consumer electronic and industrial usages. Within the next decades, demand for appliances and technologies which require silver from developing nations is set to rise.
“For investors, silver is much more of an industrial material than gold and accordingly has potential double benefits from both industrial and investment demand,” said Michael Haynes, chief executive officer at online precious-metals dealer APMEX Inc.
The U.S. Mint said sales of its American Eagle silver bullion coins remain “brisk.” They’re up about 45% year to date, compared with the same period last year, according to spokesman Michael White.
[See Also: Why Silver Coins can Save Your Butt]
Silver’s much more affordable than gold for individual investors, and their interest is in holding physical silver, according to Edmund Moy, chief strategist at gold-backed IRA provider Morgan Gold.
Moy pointed out that while he was director of the U.S. Mint, from 2006 to early 2011, sales of the number of ounces of American Eagle silver bullion coins outpaced sales of American Eagle gold bullion coins.
The ratio of silver ounces to gold ounces, based on U.S. Mint sales, has been roughly 48 to 1 this year, he said. In July, it was 87 to 1 and in August, it was 315 to 1.
“When gold prices start to go beyond the reach of small investors, they resort to silver,” Moy said.
The silver market tends to be highly volatile and it is much smaller than the market for gold.
“The higher volatility attracts momentum investors who favor [ETFs] to take advantage of the price without the burdens of holding the physical silver,” said Moy. “That’s the primary driver behind the growth of silver ETFs. With volatility, you have the potential for greater gains but also greater losses.”
Shares of the iShares Silver Trust have climbed about 18% for the quarter so far.
Demand for silver also shows in the climb among total overall silver holdings in ETFs physically backed by the metal.
“The notable elastic measurable demand increases have been reflected by new all-time highs in total ETF holdings,” said Mike McGlone, director of research at ETF Securities U.S.
He said total ETF silver holdings ended August at 645 million ounces, a record high and up from around 582 million ounces at the end of 2012.
Global silver mine production totaled 787 million ounces in 2012, according to data from The Silver Institute.
And “while silver prices can be more volatile, they are anchored around industrial use, which gives it some non-sentimental stability,” said Moy.
About half of all silver mined, compared with about 12% of all gold production, goes to industrial uses, he said.
The Mint sold a total of nearly 39 million of those one-ounce coins in 2011, which was its record for a single calendar year. So far in 2013, the Mint accepted orders for more than 33 million coins. At the current demand pace, the Mint will set a new record for sales this year, White said.
The Ultimate Insurance Policy
Throughout the last thousand years of history, most episodes of printing have been followed by pronounced periods of inflation or even extreme cases of hyper-inflation, either severely destabilizing the nation’s political stability or culminating in warfare, dictatorships, or a political collapse.
[See Also: 4 Kinds of Silver You Need to Consider]
A simple glance will quickly reveal that those who capitalized off these unique periods were holders of monetary metals such as silver. Even if you believe these possible outcomes are improbable, ownership of physical silver in the event will provide you the opportunity to not only protect your wealth but appreciate it significantly. Like an insurance policy, while the event probability is low, when fire strikes the benefits largely outweigh the cost.
At the current silver price level, the cost of insurance is tremendously cheap in relation to the wealth it would conserve if history does in fact repeat itself.
Uncertainties in Future Supply
The majority of the world’s silver comes from nations marked with political turmoil, labor unrest, and undeveloped economies. Mexico and Peru account for the largest share of production, both of which have fragile political systems and primitive infrastructures to accommodate significant improvements in production.
Several Southeast Asian nations are also included in this list, and present similar issues with regard to the consistency of supply. Geopolitical instability can quickly induce nationalizations (most recently in Bolivia), labor strikes, or poor infrastructures (accounts for high rates of flooding, fires, engineering mishaps, etc.) which can be have significant strains on supply.
That, which makes silver exceptional, are its physical qualities. Silver is the highest electrical and heat conductor of all elements. Thanks to that it has a very wide ranging use. People do not generally realise how many things around us contain silver. Computer, television, mobile, car, fridge… almost all electrical products cannot exist without a greater or lesser amount of silver. Silver is also used in medicine, chemistry (e.g. water processing), in jewelery production etc. A surprise for many is the amount of silver used in the weapons industry, for example in rockets, in missiles, in torpedoes and in submarines. A huge potential for use of silver is in the future technologies: in photovoltaic cells (where it is already much used), in nano technologies (because in the electro technologies of the new generation it is necessary to reduce the overheating of conductors, as a result of electrical activity) and also in the new silver-zinc batteries, which look to replace today’s mass produced lithium-ionic batteries. These new „silver“ batteries last twice as long. There is no danger of explosion, they are not toxic. In the very near future there will be new laptops with these accumulators, probably by Apple and Lenovo.
A new branch for the use of silver is the textile industry. An unbelievable 1200 tons of silver is used annually in the production of new polyester clothes with microscopic silver threads! Silver behaves as a disinfectant, that is, it has antibacterial properties. The reason for the smell when sweating is the bacteria reproducing on the surface of the skin. The elimination of these bacteria (by the presence of silver) also eliminates the smell and there is no need to use deodorant. The last few years have also seen the growth in volume of investment into silver – far-sighted investors have realized the perspective of the use of silver and so are quietly buying whilst the price is good.
[See Also: Investing for Your Retirement]
Does Silver Work for You as an Investment?
There is currently less investment-grade silver available on Earth for investors to buy than there is gold. Today, there is only enough investment-grade silver on Earth for every person to have 1/14th of an ounce. Silver is a 'miracle metal'. It is second only to oil as the world's most useful commodity. Aside from being money, silver has thousands of essential industrial uses. Silver is the most electrically conductive, thermally conductive, and reflective metal on the planet that has no known substitutes
For the past 30 years the world has used up more silver than has been mined, and today silver inventories are near all-time record low levels.
Investment Tips Before Investing
Take a close look at the market before you decide that silver investing is right for you. Investing in silver is different than investing in stocks and bonds. Silver moves both up and down and sometimes rapidly having a plan of action and sticking to it can help overcome this fact about silver.
Educate yourself. If you are not sure how investing in silver works, touch base with a professional who can help you with the buying and selling process.
Complete effective online research. Be careful of the information you find. There’s so much information online about silver investing, but a lot of it is misinformation. You want to learn from experts who are in the trenches tracking the silver market and making investments every day. For example, the information that you will find on http://www.silver-investor.com is based on my experiences and knowledge from following the silver market daily for more than thirty years.
Get familiar with the many different ways that you can invest in silver. You can invest in silver mining companies, silver ETFs, silver futures, silver bullion and silver coins. The sure-fire way to invest in silver without the worry is to invest in bullion or coins. This is the place to start — real metal for your future. You don’t have to pay for a mining company’s energy costs. And you don’t have to buy 1000 to 5000 ounces in a futures contract that carries too much risk for a beginning silver investor.
If you are looking to invest in silver coins and silver bars then you need to know this trick — Find sellers who are selling as close to the spot price of silver as possible (spot plus a reasonable fee). A general rule is that the more silver you are buying the less percentage of fees you should be expected to pay. When buying coins to invest in their silver content be certain you are not buying coins for their numismatic value (the value to a collector of rare coins).
Before you invest in silver, make sure you calculate how much you can invest between your IRA rollover funds, cash on hand and other assets that you wish to turn into silver. Be sure to keep your emergency fund mostly in cash for unforeseen expenses. You don’t want to bite off (invest) more than you can chew (afford).
- Stay on top of the market. There are times to buy. And, there are times to sell. Yes, at some point, it may be better to sell some or perhaps even all of your silver holdings for currency, depending on the bull market and your personal investment goals. But the only way you know when to buy or sell is if you have current silver market investing information at your fingertips.
Should You Buy Silver Now?
There are many reasons (in addition to hyperinflation) why the silver price will still be low at $100 per ounce. The least of which is the natural tendency for the majority to buy all the way up to the top.
Remember that silver, in addition to money, is an indispensable industrial and strategic asset. This changes the entire profile of silver when compared to gold.
There are various investment options for silver and it is ultimately up to you to decide which is best. Investigating each is as important as understanding the chemical properties that make silver a useful industrial metal.