Historically, precious metals have proven to be lucrative investments, although their prices do have a tendency to fluctuate greatly over the long run. Take, for example, the prices of silver and gold, both of which have skyrocketed over the past several years. In 2000, the cumulative average price of gold was $279 per ounce, but by the time October 2012 came around, it was valued at $1,653 per ounce. Likewise, silver has experienced a significant increase – from a cumulative average of $4.95 per ounce in 2000 to $30.69 per ounce in October 2012.
Both gold and silver are believed to be good investments in a struggling economy since precious metals act as a hedge against inflation – as inflation rises, gold and silver values increase. However, most experts in the past have considered gold to be the better, more stable investment.
Even though conventional wisdom tells us that gold is the safer choice, many experts are beginning to see some advantages of investing in silver:
- Silver is still a bargain relatively speaking and is, in fact, cheaper than it was in 1980, when it reached a high of $49.45 per ounce. This indicates that it has yet to reach an all-time high, even though it has increased in value significantly over the past 12 years.
- Silver is in high demand for industrial applications and is used in a variety of products, such as batteries, electronics, cutlery, solar panels, eyeglasses, automobiles, mirrors, water purification systems and many more.
- The supply of silver is limited, due primarily to its increased demand in industrial applications. Limited supplies can often lead to an increase in value.
All this adds up to a bright future indeed for silver, which was once known as the “poor man’s gold.” If you’re considering investing in this precious metal, there are several different avenues that will allow you to do so.
- Coins, bars and jewelry: While there are certainly other ways of investing in a precious metal, nothing can really compare to owning an actual physical quantity of one. Whether you choose men’s silver rings, vintage coins or bars, there is a feeling of certainty in being able to actually handle your investment, and this can be both satisfying and comforting to many investors. Coins can range in size from 1 to several ounces. A standard silver bar weighs 1,000 ounces, but there are smaller sizes available as well. If you choose to invest in jewelry, there are many reputable online retailers that offer exceptionally good prices on high quality silver. One good example is the selection of men’s silver rings currently available online, such as a braided Argentium silver men’s band.
- Futures: A silver future is a contract to buy an agreed upon amount of silver sometime in the future at an agreed upon price, which is established at the time you purchase the contract. Although somewhat complicated for the average investor, futures trading of commodities through COMEX can be a powerful trading tool. If you’re interested in silver futures, it’s best to consult an investment specialist accustomed to working in the futures market.
- ETFs: A silver-backed exchange traded fund allows investors to buy a paper representation of the metal, not the metal itself. The actual silver assets are typically held in trust by a fund manager. ETFs are popular with many investors because they are easier to access than futures markets.
- Stocks: Consumers may also choose to invest in silver through the stock market. These equities often include companies that deal with the exploration, mining or refining of silver.
Many investors agree that now is a good time to invest in silver, although it definitely comes with a certain amount of risk. Remember that even though silver prices often track with those of gold, that’s not always the case. Whether you decide on investing in physical quantities of the precious metal or any of the other investment options, it’s always a good idea to consult with an investment professionals and advisers such as CSS Partners before you invest if you have questions or concerns.