If you’re among the 90% of Americans who want to invest, it’s likely that you don’t know where to start. After all, about half of would-be investors are confounded about beginning investments, and taking the leap can be daunting and challenging.
Silver bullion is a quality investment that will almost always pay off. But what is silver bullion, exactly? Read on to learn more about this investment and why it’s a good idea for both beginners and seasoned investors.
What Is Silver Bullion?
As you likely already know, silver is a precious metal. It can be worth a lot of money because of its beauty and functional use. Silver is a highly coveted material in many industries including jewelry, industrial applications, heavy machinery, manufacturing, and aviation.
Silver bullion is an umbrella form for any kind of silver that people trade in bulk quantities. It frequently refers to silver bars and some non-collectible coins. Silver bullion is an investment that holds value over time.
Silver bullion is unlike collectible coins and numismatic currency. It doesn’t have any historical or government-assigned value. The only reason that silver bullion has any worth is because of the silver content, so purer and heavier bullion will be worth more than lighter alternatives.
Silver Bullion: A Tangible Investment
Many traditional investments like stocks and bonds are not tangible. You can’t see or touch them. More importantly, they only hold value because a corporation or governing body assigned it to them.
This means that the value of a stock can plummet to nothing in a single day.
This isn’t the case for silver bullion because of its tangible investment status. Silver will always hold some intrinsic value because of its uses in manufacturing and similar industries. There will always be some demand for it, so as long as you don’t lose the silver, the investment will pay off at least a little bit.
The tangible nature of silver also means that it’s unlikely to be lost. While you’ll be out of luck if you buy stocks for a company that goes bankrupt, the physical storage and security of tangible silver are within your control. You can safeguard it at a bank or in a well-guarded at-home safe.
Does Silver Pay Off?
The answer to this question is a resounding “yes.” The price of silver is currently at an all-time high. In 2020, it reached the $20/ounce mark, and the value has only been increasing since then.
As of mid-2023, silver is worth about $26 per ounce. Leading experts in the investment field also predict that it will reach triple digits within the next few years.
This is because the market cycle is currently comparable to that of 2000, and the market is correcting quickly. Many factors impact silver prices, but the investment will pay off in the long term.
Other Reasons to Invest in Silver Bullion
Because of its “tangible investment” status, silver is a great hedge against inflation and economic turbulence.
It also usually moves in the opposite direction of traditional investments like stocks and bonds. When stocks dip in value, the economy is lower. When the economy worsens, people want to buy and store tangible assets so that have some money in a pinch.
Silver bullion is also extremely liquid. This means that people anywhere in the world can trade in it without worrying about exchange rates and value loss across borders. It’s an accessible investment with a wide market.
When to Buy and Sell Silver
It’s always a good choice to buy silver bullion. The investment will almost always pay off because precious metals retain their value. However, if you want to make the most of the investment, assess the market and try to make a purchase when the cost is low.
Despite being an investment that’s low-risk in the long term, silver has a lot of short-term volatility. It will be worth a lot one week, worth less the next week, and then skyrocket to unprecedented heights a month later. The only way to find the best time to buy is by monitoring these trends and tracking silver prices.
But what’s more important is knowing the right time to sell.
Silver is always a pretty safe buy, and you’ll want to hold onto it for years before selling. After all, this is the #1 way to make the most of its value potential. However, you also will want to make sure that you sell during a short-term spike rather than when the market is lower than possible.
It would be gutting to sell your silver for $150/ounce and then have it be worth $160/ounce just one week later. Track market trends for quality predictions.
You also could decide to sell the silver when it reaches a pre-determined price. This doesn’t just mean a predictable payoff for lower-risk investing. It also gives you an exact sum to keep in mind so you don’t need to make challenging decisions about when to sell.
Investment Tips to Keep in Mind
Make sure that you buy and sell silver bullion from a reputable dealer. This decreases your chances of accidentally purchasing counterfeit silver that has no real value. It’s a way to minimize your chances of being scammed, especially if you look at photos of the investment and talk to the dealer before making a purchase.
It’s critical to also keep the difference between spot price and premium in mind. The spot price is the actual value of the silver in the investment. It’s what you want to keep in mind when buying.
The premium is the outwardly-issued value of a coin or the fee that you need to pay when purchasing. It’s important to make low-premium investments so you can cash out.
Grow Your Investment Portfolio the Right Way
So, what is silver bullion? In the most basic terms, it’s a precious metal. But in reality, it’s so much more than that – it’s a top-notch alternative investment that you don’t want to miss out on.
Now that you know the ins and outs of silver bullion, it’s time to get more information about diversifying your investment portfolio. Check out our “finances” tab to learn more about quality investments. You also may be interested in the “money saving” section of our page if you want to set aside funds for future investments.