Why Silver Is Going Up & Can Save Your Butt in 2019
You have to understand, what goes up must come down (Skip to our report on whether silver will go up or not here or see our report on if gold will go up this year.). This is true with gravity. This is also true of the physical world and this is definitely true with financial and stock markets.
While the certainty of market corrections is a slam dunk, the timing of such corrections is harder to predict. If people can predictably time when the market is going to correct itself, then the market would be filled with billionaires.
The truth is nobody knows, and this is precisely why the stock market is so lucrative. After all, with lots of risk, you get lots of rewards. The good news is that you don’t have to play the market completely unprotected.
By investing in precious metals like silver coins and bullion, you can ensure that whatever correction the market goes through, you will be in a fairly safe place.
Remember, in a market correction your financial health is comparative. If you think you’ve lost some of your wealth, consider yourself lucky. If you compare yourself to others who lost it all, it’s really all relative.
By positioning your assets in such a way, you can actually benefit from market corrections (When stocks suffer it has a positive effect on how high silver will end up going).
There are certain investments you can get into that cannot only help you weather sharp downturns in the market but can also position you in such a way that you can make money from such downturns.
Putting a portion of your investments into silver can provide such financial protection. Continue reading to find out why silver is crucial for ANY investment portfolio.
Table of Contents
- Benefits of Investing in Silver
- Silver's Historic Role
- Silver as an Inflation Hedge
- Will Silver Go Up in 2019?
- Is Silver a Good Investment in 2019?
- Next Steps
The Benefits of Investing in Silver
Silver’s Historic Role as a Store of Value
Unlike paper money which only has a value because the U.S. government says it has value, precious metals by themselves have value. You only need to walk down the street and flash a piece of silver (More: 4 Types of Silver Every Investor Must Have) or a piece of gold and people would naturally be attracted to it.
If you leave a piece of silver or a piece of gold on the street chances are it will be gone when you get back to it. That’s how powerful the historic role of silver is as a store of value. It is a measure of value.
The same cannot be said with a blank piece of paper. If you put a colored blank piece of paper on the street chances are nobody would pick it up. It’s just a piece of paper. The reality is that the U.S. dollar and other Fiat currencies are basically blank pieces of paper.
The only writing on them that gives them value is that there is a guarantee by a government that that piece of paper has value. Once people lose trust in the government backing up that paper, that piece of paper goes back to being a worthless piece of paper.
The same cannot be said with precious metals like silver coins. You can read more about What makes silver proof coins special?
Historical Value of Silver
Below is the price of silver dated over the last 100 years. If you look closely, you will notice that the value of silver has increased over the past 100 years despite the huge trends. The grayed out areas on the graph mark recessions. Notice that when a recession is occurring, the price of silver shoots up.
In recent history in the U.S., Donald Trump becoming POTUS had an impact on silver.
Current Price of Silver Today
Below is a chart from Kitco that displays the silver prices of 2017.
Since the price of silver increases and decreases daily, we have linked one of our favorite resources for keeping an eye on the daily price changes. Linked here.
The chart below is amount silver was priced at during 2000 - 2017.
Price of silver by day and month in USD. Updated for October.
Silver as an Inflation Hedge
Silver can be a great inflation hedge because of its historical role as a store of value, and its widely acknowledged ability to store value. Inflation is really a cheapening of money.
As time goes by, every dollar you hold in your bank account goes down in value. The Federal Reserve makes sure of this by increasing inflation rates. The things you can purchase with that one dollar today will cost you more ten years from now for that same dollar. That’s how inflation works. It rots your money. (See: Obama and His Foolish Spending Record)
Silver keeps up with inflation. With each passing year as inflation goes up and as money becomes cheaper, precious metals keep up with the times. They allow you to hedge against inflation. Sort of the same way real estate keeps up with inflation.
Peter Schiff goes over the Powerful Case for Silver
Silver’s Industrial Demand
Another reason why silver will continue to hold value in the future is the fact that there is an actual industrial need for silver. While gold is pretty to look at and there are a few industrial items that require gold, there are lots of industrial items and products that require silver.
Silver is also needed in many industrial processes. Just judging by the demand of industry for this precious metal, silver will retain its value in the future. If you strip away its historical role as a store of value or its usage as jewelry, silver will still be in demand.
As a result, the price of silver will still be dictated by industrial demand. It will never lose value because there’s an industrial demand for it.
Silver’s Base Jewelry Demand
Throughout history, people have loved to wear silver jewelry. There is something about silver’s bright metallic glow that makes people gravitate to it.
Considering the fact that gold is very expensive, people often consider silver as a secondary option for jewelry. Considering its lower price, there are a lot more people wearing silver jewelry. It is this popularity that ensures that there is a base demand for silver.
Just like with the discussion about silver’s industrial demand above, the jewelry demand for silver persists through time. In fact, in many countries silver is preferred as jewelry. They can be melted down into their base metal parts and converted into silver items, whether for industrial purposes or jewelry. In the same way, industrial silver and jewelry can be converted into silver coins & bullion as well.
When Gold Goes Up…
Silver and gold tend to go hand in hand. When the price of gold goes up due to economic uncertainty, economic collapses, revolutions, political uncertainty, silver is sure to keep up with gold. Read more about Is It True That Gold Is Not in a Bubble Situation?. Precious metals tend to be linked to each other.
Of course, this link isn't necessarily automatic. Still, silver will go up when the price of gold or gold bullion go up due to uncertainty in the market.
Silver Coins Have Their Own Investment Value
As mentioned above, silver as a metal is a historical store of value. Whether used for industry or for jewelry, silver makes for a great inflation hedge because it has a great intrinsic value.
With that said, you actually increase your chances of making money with silver by buying silver coins. Why? Silver coins have their own intrinsic value. That’s right. Silver coins carry collectors value.
Not only would people want to buy silver coins because of the base silver metal content that they have but because the value of these silver coins goes up with time. Just like with any collectors item, the rarer an item is the more expensive it gets.
This holds true with silver coins. In fact, really old silver coins are worth more on a weight basis than the base metal that it contains. When you invest in silver coins, you’re really engaging in a two-pronged investment strategy.
You are investing in the base value of the metal as well as investing in the collector value of the silver coins. You get two streams of value when you invest in silver coins.
Silver is an Investment Haven During Financial Crisis
Just like with any other precious metal, when people start panicking about the health of the economy, or they get the jitters because of political instability, they flock to precious metals.
Precious metals are very liquid. You can easily sell gold or silver in the market. Also, they are powerful stores of value as paper money loses its value and as political regimes come and go, people trust in precious metals remain the same.
Since they are very easy to convert and their value remains over the long haul, silver makes for a great investment haven during financial crises. As mentioned above, silver coins add an extra layer of value because silver coins are also collectors items.
So not only do you get more value from your collection of silver coins during a financial meltdown, but you can also sell them very quickly for both the collectors value premium and the value of the base metal that they contain.
Silver’s Accessibility is its Key Strength
A final key driver for the price of silver and silver’s resiliency during economic hard times is the fact that it is accessible. Unlike gold which can be quite expensive compared to silver, silver is much cheaper.
As a result, more people would want to flock into silver. This can result on a percentage basis, higher rate of appreciation than with gold. Since gold is more inaccessible due to its price, it is easier to ride percentage price volatility with silver.
In other words, you get more bang for your investment buck with silver because it’s more accessible. The downside to investing in silver coins and silver in general is that it’s so accessible that if the price spikes up too high, people might flood the market with their silver spoons, silver jewelry and industrial silver.
This is what happened in the 80s (Also known as Silver Thursday) when speculators attempted to corner the silver market.
Best Options When Investing in Silver
Silver in Your IRA or 401(k)
One of the most popular options for the typical American is diversifying their IRA or 401(k) by putting a portion of it into precious metals. The old saying goes, "Don't put all your eggs in one basket." This is especially true when investing.
By diversifying your investments you can protect your assets from potential substantial losses. The best way to do this is speaking with a specialist to discuss your options. We also offer a complimentary investment kit to help get you started. You can do both of these things by clicking here.
There are typically two options when it comes to investing in silver. You can go the route of purchasing silver bars and rounds or you can purchase coins. Both have their benefits.
For example, bars provide the best premium over spot price. Basically this means you will get the most for your buck. Bars are also easy to store and transfer due to their shape and size.
The final benefit is the speed at which you can build your portfolio. With only a few bars you already have a large amount invested in the metal.
100oz or 10oz Bars?
The decision whether or not you should buy 100oz bars instead of 10oz comes down to how much silver you plan to invest in. A 100oz bar will yield more silver at a better price but if you intend to invest a bit less or wish to purchase something else like silver coins as well as bars, 10oz might become more appealing. Invest in the City of Silver today.
As mentioned above, the benefit of investing in coins comes with the collectible value and the value that each coin holds in silver. This dual feature can be very appealing to people looking to diversify their portfolio.
Best Silver Coins to Invest In
1) American Eagle. The silver American Eagle coin is one of the most popular coins and is very well known to investors. It is especially popular for those looking to put silver in their IRA.
2) Canadian Maple Leaf. A Canadian classic. This coin is also ready for IRA options.
3) Australian Koala. Another popular choice for investors, this Australian coin features an image of a Koala on one side with a portrait of Queen Elizabeth II on the other. Also available for IRA options.
4) Austrian Philharmonic. First minted in 2008, this popular Austrian coin has made a popular impact on the coin market. IRA ready.
5) Australian Kookaburra. This coin features a portrait of Queen Elizabeth II on one side while on the other a laughing kookaburra. These coins are a huge hit for silver investors and coin collectors.
Silver Coins, Bars, or Retirement Investing? - Which Works Best?
When buying silver bullion in either coins, bars, or rounds, there are some things to consider before choosing. For one, if you are interested in combining your retirement into precious metals, we recommend you use a silver IRA.
If you are simply looking to diversify your portfolio with silver investment, get started investing knowing your silver is in the safest vault in the world. Read more here.
Using Silver and Precious Metals as a Refuge During Market Crashes
As mentioned above, when the price of silver spikes up during market crashes and economic uncertainty, this is not an accident. The reason people do this is not because they are just afraid.
While a fear does play a big part, there’s also a lot of strategy. Why? When you park most of your assets into silver during a market correction, you are essentially protecting yourself from further erosion in the market.
If the market completely flat lines, the value of your silver spikes up. As a result, the value of your silver coins tends to offset whatever deterioration of net worth you suffered when your stock investments crashed. Precious metals, whether silver, palladium, platinum or gold has this core feature. People don’t flock to them for no reason. They form a great economic refuge during times of economic and political uncertainty.
You can use this predictable pattern to your maximum advantage as a hedge in case the market goes south. At the very least, silver coins make for a great hedge investment that also diversifies your portfolio.
Converting Silver Assets to Scoop Up Depressed Blue Chips
Did you know that by buying silver coins, you are actually positioning yourself to make quite a bit of money when the market crashes? How? Very simple, by diversifying portfolio into silver assets and your free investments into silver coins, you effectively come up with a hedge when the market slides down.
Once the market crashes, you can then convert some of your silver assets into ready cash. You can then use this cash paired with the margin that you get from your broker to scoop up lots of depressed blue-chip stocks (Get started in a Step By Step Guide To Stock Investing). Usually the market experiences a quick bounce up after a serious crash. You can then exit your margin positions when you get a quick spike and then retain some of your blue-chip stocks as profit.
By riding the market up and down after a market crash using the liquidity provided by silver assets like silver coins, you can actually scoop up quite a bit of high-value stocks.
These stocks of course weigh cheaper after a crash, but they still retain high value because they are proven money makers. By scooping up lots of high-value stocks right after a crash, thanks to silver, you can position yourself to making even more money once the market fully recovers.
So is Silver a Good Investment in 2019?
Make no mistake about it. Investing in precious metals like silver coins not only helps you weather sharp market downturns, but they can also help you position yourself to take advantage of market recoveries.
At the very least, investing in precious metals help you stay liquid when you need liquid assets to take advantage of unique market opportunities. If silver is something you are not quite looking for, you can consider other metals such as gold. Continue reading Stabilize Your Investment Portfolio With Gold.
Will Silver Go Up in 2019?
A popular question for the new year. The year of 2019 is looking to show a ton of potential for the precious metals markets. Both gold and silver are metals you should be looking into. The current state of the U.K. Brexit vote to leave the European Union is something to keep an eye on as well.
In the years to come, the threat of Fed rate hikes and geopolitcal events rapidly occuring will be percise factors to consider. Also, the most recent World Silver Survey by the Silver Institute and Thomson Reuters' GFMS team, present the findings that in 2016 the silver market was in a great deficit of 147.5 million ounces. This has been the largest deficit in three years and has become the third largest on record.
Firms that were surveyed by FocusEconomics in 2017 expected an average silver price of $17.50 in 2017 and $18 in 2019.
Even allocating a small percentage of your portfolio into precious metals will provide yourself with a buffer against potential stock crashes (See: Why Pick the Most Precious Metal for Your Investment Portfolio). Simply by diversifying a portion of your investments into one of these metals can protect yourself from the potential of a market crash this new year.
Next Steps for You
Silver has its advantages and should be considered for anyone’s portfolio. Whether you are looking to purchase physical silver bullion or invest in the precious metals with a broker, both options are great and should be considered.
Invest in the City of Silver
When would be the best time to invest a portion of your portfolio into silver? Now! Invest knowing your silver is safe in one of the most secure vaults in the world. Get started today.