Reasons to Buy Physical Silver
Silver might not always be in the spotlight like gold, but it’s nonetheless a highly desirable and important physical asset for portfolio diversification. It can offer many of the same benefits as gold but at a more approachable, everyday price.
Why do people buy silver? Like gold, silver—in the form of bullion and coins—is seen as a safe-haven asset during times of political and economic adversity. But the reasons to buy silver go beyond that.
Learn why people buy silver and why you might want to as well.
Silver stands out as an asset that serves as a store of wealth. Over time, silver holds its own in the market rather than depreciating. For example, from September 1, 2000, to September 1, 2020, the price of silver rose nearly 473%. A bonus is that you can easily transport silver. Another benefit of silver is that, in relatively small quantities, it can be stored in a safe at your home.
Silver provides a hedge against inflation because of its intrinsic value, as opposed to paper currency. Therefore, it has been known to weather a low-interest-rate environment better than currency does. U.S. News & World Report notes the “perfect environment” for buying silver is a combination of low interest rates, a declining dollar, strong economic growth, and rising inflation.”
“As inflation rises 1% year over year on average, silver gains 17.4% on average, while gold gains 6.3% on average,” adds U.S. News & World Report. For comparison, “The S&P 500 gains on average 2.4% per 1% rise in the Consumer Price Index year over year, so both precious metals provide a greater inflation hedge than stocks.”
Silver is a strong performer.
Some years, silver outpaces the price gains of gold. Other years, gold gains over silver. But the fundamentals of silver “will drive the price even higher over time for the simple reason that demand will outweigh the supply. As long as you buy only from reputable dealers, buying silver … is one of the least risky [market moves] you can make,” according to Yahoo! Finance.
Why Buy Silver Coins
Silver coins, including American Silver Eagles, appeal to asset buyers of all kinds and ages. A silver coin’s design, low production numbers, and marketplace demand all make up a coin’s overall scarcity and, ultimately, its performance potential. And, of course, silver coins can be used as currency.
Why Buy Silver Bullion
When you buy silver bullion (particularly in the form of bars), you end up with more of the precious metal by weight than if you buy silver coins. Silver bars generally have a lower premium than silver coins and closely track silver’s spot price, making them an advantageous option for bulk silver buyers. On top of that, silver bullion bars are easier to store in a vault than coins based on their shape and stampings.
Unlike paper assets such as stocks and bonds, silver is truly an asset you can feel and hold. The physical nature of silver offers security to an asset holder, and it’s increasingly prized as an industrial metal and for its aesthetics as a metal of beauty. Global silver demand is forecasted to rise by 11% in 2021, notes The Silver Institute.
Silver is a less expensive precious metal.
Gold may be out of reach for some people who want the security of owning precious metals but aren’t ready to spend so much. Thankfully, silver offers the benefit of being a precious metal while coming with a much smaller price tag. “Silver has historically been the most affordable precious metal,” the U.S. Mint notes. In August 2020, for instance, the price of gold climbed past $2,000/oz., while the price of silver hovered close to $30/oz—a great entry point for new buyers.
PROTECT YOUR RETIREMENT
The Internal Revenue Service recognizes the potential benefits of incorporating silver into your retirement strategy. The agency allows select silver coins and bars to be held in a self-directed IRA.
IRA-approved silver coins and bars include Silver American Eagle Bullion Coins, Silver American Eagle Proof Coins, Silver Australian Kookaburra Coins, Silver Austrian Philharmonic Coins, Silver Canadian Maple Leaf Coins, and Johnson Matthey Silver Bars.