You will probably agree that everyone who believes in owning precious metals as a part of their portfolio loves gold. Of all the major precious metals, gold, platinum, and silver, silver seems to be overlooked, or even pointedly ignored, when it is time to make investment portfolio decisions. You may be able to think of a variety of reasons for why this is the case.
The most obvious of them is probably that silver’s price is so much lower than gold and platinum prices. You have also heard about gold and platinum in the news almost every week, while the pundits seem to be mostly silent on the gray metal. The truth is that there are a variety of good reasons for why you should consider including silver in your investment portfolio.
Silver Is Also an Industrial Use Metal
One of the great things that you will find going for silver is that it is not in demand simply for jewelry and investment purposes, as is its bigger brother gold. While gold has limited additional uses besides these, silver offers more than simply inflation and safe haven protection. Silver is widely used in industries that grow over time, and it offers investors an economic recovery scenario based investment as one of its attractive facets.
The Thousands of Uses for Silver
Here are some good examples of how silver is tangibly useful and in industrial demand for you to consider. You would never be able to utilize your paper stock certificates to manufacture an anti bacterial agent. Your bank account balance will not develop film. Neither your treasury bonds, T-bills, money market accounts, nor certificates of deposit will be of any use in patching up electrical circuits. Yet silver is capable of doing all of these activities, and more importantly, it is an essential element in all of them.
Silver stands in contrast to all other commodities and paper investments in being useful for actually thousands of applications that serve to hold down the amount of silver circulating at any given time. You probably already have silver in your house without realizing it, since you own a computer, multiple television sets, and other forms of electronic equipment.
Besides being an integral component of these important home appliances, silver is found in your car bearings, in your batteries, and probably in any medical equipment that you needed when you last had surgery performed. Perhaps more importantly, silver is a key component in up and coming industries that are growing by leaps and bounds, such as water purification and solar energy.
Growing Industrial Demand for Silver
Assuming that the developing world and technologies continues to expand, then the critical demand for silver will only skyrocket. This means the silver that you should be holding in your hand or safe deposit box is constantly increasing in scarcity and real value. Paper investments, and even gold, may serve no practical use besides their principal investment role, but silver is literally indispensable.
Silver is Rarer than Gold
This little news flash will probably shock you, but silver is actually rarer than gold in today’s world. The amount of silver produced each year is negligible in comparison to the yellow metal. Consider this for a moment. All of the above ground gold on earth can be fit inside of a cube that is sixty-seven feet on each side. That sounds like a ridiculously small amount of gold, and it is. But all of the above ground silver stock would go inside of a cube that is only forty-seven and a half feet per side.
You will also be surprised to learn that while there are about 5.2 billion troy ounces of gold available for use above ground, there are a mere 1.0 billion troy ounces of silver available above ground for the thousands of silver uses. Which metal would you rather have an investment in, gold that is higher priced and yet theoretically five times more abundant than silver, or silver that is astonishingly cheap by comparison and yet used daily in thousands of practical and growing industrial applications?
Silver Offers Greater Appreciation Potential Compared to Its All Time High
Gold has vaulted above its previous all time high of about $850 per ounce made back in 1980. You may have heard that it is currently trading at only a few dollars below its latest all time high of around $1,260 per ounce. Contrast this with silver. Silver reached over $42 per ounce in the early 1980′s. It is under $19.50 per ounce these days.
So while gold has already eclipsed its multi-year highs and is trading just under its all time highs, silver is still $22.50 below its all time high, representing a possible in excess of one hundred and fifteen percent gain potential to reach its all time high again. However you look at the numbers, silver possess far more room for appreciation without having to break new ground to achieve it.
Silver Features Greater Price Volatility
When you look at the daily price charts of silver versus gold over any given period of time, you will find that silver has practically always proven to be more volatile than the other precious metals. More than this, silver creates higher returns than does gold. The reasons for this are based once again on silver being considerably rarer than gold.
Such a small amount of silver throughout the world changes hands on a daily basis that even tiny amounts of silver being bought are able to significantly influence the entire silver market. Silver is one of those rare investment opportunities that showcases its volatility as a positive element. Just look at the history of the prices of silver, and you will quickly discover that silver is able to move up fast, sometimes as much as ten to twenty percent in only a short couple of weeks.
Silver Is Recommended by Savvy Self Made Billionaire Commodities’ Investor Jim Rogers
Years ago, you may have heard about how George Soros and his then partner Jim Rogers made literally billions of dollars for themselves in the early 1990′s in their foreign exchange investments by taking the opposite position as the Bank of England on the future of British Pounds. After they two parted ways, Jim Rogers later went on to become a legendary commodities investor based in Singapore. Jim’s advice is eagerly sought out by numerous investors around the world.
In a recent interview this summer, the commodities guru was asked about his positions and sense on gold bullion investments and prices. He promptly replied that he was not selling his gold, and that he never sells gold; but that he was not buying anymore of it at these price levels. Instead, Jim said that he is buying silver aggressively now.
In his explanation for this investment behavior, he cited the fact that silver is so far below its historic all time high price. He also mentioned briefly the rarity of it when compared to gold, as well as its many industrial uses. So now you know as much about the reasons for adding silver to your investment portfolio as one of the world’s richest and most successful investors of all time.
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