For whatever reasons, silver has always been considered to be second place to gold. Many believe that it is just not as profitable. But lately, silver is gaining a whole new level of respect. Shares of silver are on the rise and beating out gold and other industrial metals. It is even beating out some stocks and Treasuries. This is all wonderful, but the question still remains. Is silver a smart investment.
In one word, YES! Silver is a smart investment. According to Gregory Marshall, president and CEO of Global Asset Management, silver could be the investment of the century. And here is why. As with everything else, it boils down to supply and demand. Demand for silver is on the rise. The demand is actually outweighing the supply. And as demand goes up, so does the value of the asset.
It is being used more and more in industrial applications, water and air purification systems and the solar energy sector.
Silver is also a very attractive investment for the smaller investor. Gold is very expensive. Most small investors can’t afford to purchase a significant amount. Silver on the other hand is very affordable. And though it is not gold, it can still provide you with the same protections that gold does.
Even though silver is considered to be a smart investment, you still need to be very careful as there are risks involved. Silver tends to be more volatile then gold. Its value can also move according to whats going on in the economy. This is because it is being used more and more for industrial purposes. And truthfully, there will always be a much bigger market for gold.
An economic recovery may be critical in order for silver to truly prosper. Because if the economy recovers, the demand for silver will go up. Now if you plan on adding silver to your portfolio it is best to invest in a silver ETF or exchange traded fund. Good ones include Physical Silver Shares or iShares Silver Trust.
Please be aware that if you hold your silver ETF’s in a taxable account, the IRS will view them as collectibles. This means that you will be taxed at the collectibles rate and not get any long term capital gains rates if the investment is held for longer than a year.
All in all silver is a great investment. Just do your research so you know exactly what you are getting into.