Saturday, 18 May 2013

The Pros and Cons of Investing in Silver

There are both pros and cons to investing in silver. As a commodity, silver tends to fluctuate up when stocks are down and the economy is troubled, and lose value while the economy is in good shape. That being said, there are some reasons why investing in silver, no matter the state of the economy, can be a very good thing.
The Pros of Investing in Silver:
  • Avoid the loss of purchasing power if the dollar decreases in value through inflation. If you buy silver, your silver will increase in price as the dollar decreases.
  • Silver is tangible and can be used for sale, barter or trade in case of economic collapse or massive currency devaluation.
  • Silver has many industrial uses and as such is more than just a precious metal/ store for wealth. Silver is used in electronics, antibacterial preparations, clothing, technology and more. Thus its demand will continue as long as technology does.
  • Silver is relatively inexpensive per ounce compared to gold and other precious metals. Thus it is easier to begin investing in silver compared to gold.
  • Junk silver -- the 90% silver quarters and dimes once used as currency -- are in low enough values (for example, pre-1965 quarters are worth around $4.50 each) to be used for exchange if necessary. Try getting change for a $1,500 ounce of gold.
The Cons of Investing in Silver:
  • Silver can go down in price after you buy it. Th is true of almost any investment you make, but it's important to acknowledge that there is no guarantee that silver will keep going up in value.
  • Silver can't always be liquidated immediately if you need to buy something with cash. If you don't have a silver dealer in your area, or a good pawn shop or jeweler where you can trade in the silver for money, you may experience a delay between when you need your cash and when you can get money for your silver.
  • Silver held in one's possession is at risk of theft even if well secured.
  • Other investment opportunities -- real estate, stocks, small businesses -- may outperform your returns from silver. There is the risk that you will not make as much money investing in silver as you would in some other venture or commodity.
Despite the potential cons to investing in silver, many investors feel the pros outweigh the drawbacks and turn to silver as a safe haven for their money, a hedge against inflation, and a true investment that may see better returns than gold in the months and years ahead.
Learn how to buy junk silver, as well as pitfalls to avoid when you invest in silver coins and bullion. Author Maria T. Miller enjoys finding junk silver deals and collecting coins for long-term savings.

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