Silver is so much more than just a metal used in things like jewelry, silverware and teapots; it also has varied and sometimes surprising uses in everything from medical treatments and devices, to electronics we use regularly, to solar energy!
All of those things are pretty great, but what is truly amazing about silver is the protection it can offer investors faced with tumultuous economic conditions. Many investors rely on silver as a wealth preservation tool in their investment portfolios. Here’s why:
Silver has a long history of being tied to currency in the United States. In fact, the First Coinage Act of 1792 defined the dollar as 371.35 grams of pure silver.
Over the next two centuries, the price of silver moved up and down but silver really began taking off as an investment in the late 1970s.
Although silver has not been tied specifically to our currency since 1971, demand for the precious metal continues to grow. (To learn more about the history of silver over the years, download your copy of our Silver Investment Guide today.)
Traders seem to be pulling back and there is evidence that points to the dollar potentially declining as we move further into 2016. What direction the dollar ultimately goes will depend largely on whether the Federal Reserve is able to meet its own forecasts.
When the dollar drops (as it inevitably will do at some point), your portfolio assets in "traditional" investments will likely be negatively affected. That’s where investing in silver comes into play. Think of it as an insurance policy, hedging your more traditional investments so your portfolio has a measure of protection against loss.
Industrial demand for silver continues to grow as new uses continue to emerge, such as 3D printing, and existing uses grow in popularity, such as solar energy use and the proliferation of electronics using silver like smartphones, computers and tablets.
At the same time demand is rising, production costs have risen making some silver mining operations unprofitable. In fact, many of the major national mints have had to ration sales. Coins such as the Silver Eagle, arguably the world’s favorite coin for investing, stockpiling or just collecting, sold out in 2015, just as they did in previous years.
This supply and demand dynamic makes the silver that is mined that much more valuable.
The gold-to-silver ratio, or GSR, is a measure of how many ounces of silver are needed to purchase one ounce of gold. This helps investors determine the relative value of precious metals. When the ratio is high, it is generally thought to be a good time to buy silver because of its low cost (you can buy more silver for fewer dollars.)
Initially, the GSR was set at 15 (in 1792.) The average GSR in the 20th century was 47. At the time of this writing, the GSR is in the upper 70s!
When you invest in silver through Gold Silver Group, you have a tangible asset that you can look at and touch any time. When your paper investments are going down in value, you can look at your silver and be reassured by the knowledge that its value cannot be changed by any bank or central government.
All of this points to continued wealth preservation benefits for investors holding silver. There are no guarantees, but investing in precious metals, and particularly silver, have given many investors some needed peace of mind with their portfolios.
Is now the right time for you to purchase silver as an investment? Contact us today. Our experienced account executives will review your personal financial goals and objectives with you to help you review your options so you can determine whether silver makes sense for your portfolio.