Silver Bullion as an Investment

silver as investment can be an effective way to protect assets and hedge against inflationInvesting in silver has become increasingly more popular over the last forty or fifty years and many factors have contributed to a rising silver demand. Perhaps the biggest was the end of the Silver Standard in 1964, when the US treasury stopped minting silver coins for circulation. At that time, silver’s intrinsic value grew higher that the face values of the coins themselves, forcing mints to make common coins from cheaper metals. Since then, the majority of silver clad coins have been removed from common circulation and set aside as an investment or traded for their silver content values.

Industrial uses for silver are also increasing, adding to the recent surge in demand, helping silver achieve strong returns in the markets over the last 5 or 6 years. Silver is used for many modern industrial applications including electronic circuitry, batteries, medicine, nuclear reactors, photography and imaging, water purification, dentistry, superconductivity, mirrors, jewelry, fine dining ware and more. Demand for silver is strong and mining companies around the world will continue to be pressured to find silver reserves to keep up with the demand of investors and collectors.


Silver is a commodity in the stock market. Recent economic troubles in the markets have created a wave of new silver investors, who seek safety in silver as a hedge against plunging common equities and US dollar assets. The stock market fall in the second half of 2008 was preceded by silver’s March 5th intraday high of $21.44, a price that had not been reached since October of 1980.

silver as an investment yields strong returns in the markets from 2001 to 2009

For these reasons and more, many financial consultants now strongly recommend that investors balance their portfolios with at least 10% invested in precious metals.

 

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