Should I Invest in Silver?: 8 Key Factors to Consider

silver jewelry

You may be pondering the following question: “Should I invest in silver?” Investing in precious metals like silver has its advantages because it’s a physical commodity that’s stable.

In particular, silver is a beneficial asset due to its cheapness and accessibility. It can also produce high returns if you know when to buy and sell. However, there are drawbacks to be aware of, such as market fluctuations.

This article will highlight some pros and cons of investing in silver. Let’s explore. 

8. Safe Haven 

Like gold, investors flock to silver during times of economic distress. Overall, it’s also a safe place if you’re uncertain about your finances and wish to park your finances in a safer asset. In fact, silver is one of the safest bets you can make because it has never undergone a default. 

Many investors pour their funds into silver bullions. Silver often gets overlooked, and many investors prefer gold. However, silver can be just as reliable as gold. 

During economic downturns, investors rely less on traditional stocks and more on assets with intrinsic value. Due to silver’s inherent value, the commodity won’t undergo a crash compared to stocks.

With that, silver is subject to fluctuating market conditions like any other asset. Due to its solid track record, however, it won’t undergo the same market instability as the stock market. 

7. Silver Can Be a Better Investment 

Silver is cheaper than gold and is usually more accessible to new investors. With its cheaper price also comes versatility. Silver has more practical applications, such as: 

  • Thermal conductivity
  • Electrical conductivity
  • Reflective surfacing 

Silver investing also opens the door to other industries. For instance, many investors invest in silver jewelry alone. Plus, silver has value within the gold jewelry market, as manufacturers use silver when making gold jewelry.

Gold is a soft model that requires other metals (i.e. silver or nickel) to make it harder. Additionally, silver will continue to be in demand as more manufacturers incorporate silver during industrial applications. If you’re deciding whether to invest in silver vs. gold, check out CMI Gold & Silver.

6. Higher Returns

Overall, silver tends to rise higher than gold, especially during bull markets. As a result, you can see higher returns. If you buy silver during a bull market, you’re more likely to receive a higher return. 

With that, investing in silver can be a double-edged sword. Silver rises more than gold historically, but it also falls more than gold when the market is down. 

Plus, silver is more volatile than gold. If you’re a reactionary investor who sells an asset at the first sign of trouble, silver investments may not be the best option. Instead, consider gold investments. If you buy silver, prepare to fare through some degree of uncertainty.  

5. Good Track Record 

People have used silver as legal tender for thousands of years. Additionally, there are no signs that silver will wane in value in the future. It has always retained value in some form or another. Traditionally, many investors prefer silver instead of fiat currency, which is more volatile than commodities. 

With that, silver’s volatility cannot be understated. First, the silver market is smaller than the gold market. Therefore, silver prices are susceptible to sudden price shifts. Moreover, the price of silver is significantly less, adding to the instability.  

4. Worldwide Growing Demand

Silver allows you to invest in overseas markets. It has surged in value all over the world, especially in developing markets like China and India.

Both of these nations value precious metals like gold and silver. Both nations are also strong manufacturing centers, and overseas markets use silver for industrial applications. 

As an investor, you may see some volatility as the supply fails to keep up with demand. Either way, the rising demand will make silver a hot commodity going forward. 

3. Immune From Cyberattacks

Since silver is a physical asset, cyber thieves cannot hack or steal it digitally. Cybercrime has been on the rise. Conversely, digital trading is susceptible to fraud and theft.

However, thieves can steal your silver if they find your stockpile. If you buy large quantities of silver, you must store it accordingly.  

If you need to store silver, find a safe place, such as a bank or your home. Regardless, store your silver in a dry place. Further, you can protect it from tarnishing by sealing them in plastic bags. 

2. Versatile Investments

You don’t have to invest in physical silver to obtain a viable return. One non-physical option is silver exchange-traded funds (ETFs). A silver ETF allows you to invest in silver without owning the asset physically.

You can buy and sell the ETFs during market hours. However, silver ETFs are few in the United States

1. Diversify Your Portfolio 

Silver is also a great way to diversify your portfolio. If the value of your stocks declines, you’ll have silver to offset the downturn. 

Due to the volatility, however, avoid making silver a large part of your portfolio. Experts suggest a five-percent silver investment within your portfolio, especially if you’re a newbie investor. 

Should I Invest in Silver Overall? 

If you’re wondering, “Should I invest in silver?”, the answer depends on your risk appetite. If you’re not the adventurous type, consider gold instead. Silver comes with short-term fluctuations.

However, silver is cheaper and allows more investors to access the asset. Regardless, silver is a stable physical asset that you can rely on when the market tumbles. 

Interested in reading more? Read more on our blog to learn about other finance topics.