Investing in silver can be a great way to diversify your portfolio and hedge against inflation. Silver, like any investment, carries its fair share of risks, but it also offers a strong store of value and is often positively correlated with the level of business activity and industrial production. The price of silver is also influenced by the situation in the base metals markets, since silver is extracted as a by-product of them. Additionally, silver prices tend to follow those of gold with some delay, only to catch up with them later, and often overreact compared to the behavior of gold.
Before investing in silver, it's important to compare the performance and expense ratios of some funds to gain a full understanding of the investment you are making. Gold tends to win all the glory in the investment world; however, silver carries its own unique considerations and risks that investors should consider. Silver is relatively cheap, and if you make consistent investments over a long period of time, you'll get a lot of metal. The silver market is a global market, and London and New York are the two largest silver markets in the world. Famous investors such as George Soros and Carl Icahn have publicly discussed buying silver and silver stocks as ways to hedge market risk.
As Mike Maloney says in his bestseller, Guide to Investing in Gold and Silver, “gold and silver have been revalued over the centuries and have called for the fiduciary role to be held to account for themselves.” For most futures traders, the goal is to make money as the price of silver fluctuates rather than receiving silver. Investors can purchase publicly traded or certified silver products to avoid the risks and costs associated with the transfer and storage of physical ingots (silver is less dense than gold, so it takes up much more space). Silver may be a cheaper alternative to gold, but it also comes with unique considerations and risks that investors should consider. Silver maintains its long-term value and works well when interest rates are low and fixed income investments don't generate large returns. When investment and industrial communities think that the price of silver is going to rise, they make big purchases, which causes supply to leave the market and demand increases, which causes the price to rise. Therefore, investing in silver can be a way of betting on technological advances and the clean energy movement. Overall, investing in silver can be a great way to diversify your portfolio and hedge against inflation.
However, it's important to understand all of the risks associated with investing in silver before making any decisions. Compare performance ratios of funds, purchase certified products when possible, and consider how silver may fit into your overall investment strategy.