All that glitters isn’t just gold: why invest in silver too

why invest in silver

Gold isn’t the only precious metal – Why you should invest in silver too

Why invest in silver, when gold is the ‘go to’ precious metal?

If you currently invest in a precious metals then it’s likely to be gold, and with good reason. As the most popular of the precious metals, gold is recognised as a valuable commodity and is available in a range of formats and weights, which are easily tradable. Gold has historically been a reliable way to both protect and grow your wealth.

But gold is not the only precious metal investment. Experienced investors know that, as with all types of investment, having all your eggs in one basket isn’t a good idea. It’s unlikely that all the shares in your portfolio are in one company, so why not consider diversifying your holdings in precious metals too? Metal diversification is a sound strategy for many reasons:

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Silver’s historical position

Silver, like gold, has been considered a precious metal for hundreds of years and has been utilised as money throughout history. Its value is intrinsic, meaning that like gold, there’s never a shortage of buyers. As such, silver is a great vehicle for securing your wealth against threats such as volatility and for growing your portfolio.

Much of silver’s use can be roughly split three ways; between ‘silverware and jewellery’, ‘photographic’ and other ‘industrial’ uses. These are the key drivers of the worth of silver and why it has become such an attractive investment.

The use of silver, particularly in the photographic and technology fields, has been key to its rising value over time. In photographic materials, the silver can only be used once, meaning the volume of available silver present on the planet is reducing every day. The technological uses for silver are naturally increasing, as more and more advances in technology are made every day – relying on silver for component parts.

The use of silver, and its value, has changed over time but one thing is certain – the demand is growing and the stock of available silver on the planet is steadily decreasing. An increase in demand and a slowly diminishing supply, usually means one thing for prices..!

Silver is undervalued

The historical ratio between gold and silver is currently out of sync. Throughout history silver has, on average, been around 10-15 times cheaper than gold. Right now this gap has widened so that 1 ounce of gold, for example, will buy an astounding 75 ounces of silver. Many experts have identified this significant undervaluing as a huge opportunity to purchase silver.

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Why invest in silver coins or bars

In addition, silver has many other strengths, making it a very worthwhile choice to strengthen your portfolio. Consider the following benefits of investing in silver:

  • Low entry point – because of silver’s relatively low price (when compared to gold), it’s an attractive precious metal when either first investing in metals or when adding to an existing portfolio.
  • Good ‘hedge’ against other investments – Silver is typically not linked to falls in the stock market or interest rates, so when stock markets fall or interest rates are low for example, your silver investment still has the potential to rise.
  • VAT Free – silver can be a VAT-free investment. Not all dealers offer VAT-free silver, but our silver bars, for example, are VAT-free if purchased through us.
  • Likely to yield higher returns than cash deposits – with interest rates low, your returns may well be better than cash investments such as ISAs or bank savings. Like a bank though, your investment can be securely held by us, so there’s no need to hide your silver bars under your mattress!

If you’re interested in investing in silver, or would like to add to an existing gold investment, then simply contact Physical Gold here. As a leading precious metals dealer, we’re able to offer competitive prices on gold and silver and organise secure holding, or ship your silver directly to you. Our consultants can also talk through your requirements, to ensure you make the best investment for your personal situation.

Daniel Fisher

Daniel Fisher formed physical Gold in 2008, after working in the financial industry for 20 years. He spent much of that time working within the new issue fixed income business at a top tier US bank. In this role, he traded a large book of fixed income securities, raised capital for some of the largest government, financial, and corporate institutions in the world and advised the leading global institutional investors. Daniel is CeFA registered and is a member of the Institute of Financial Planning.

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