Silver and the Value of Investing in Precious Metals

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Though there are probably many learning points for investors to take from the current recession, one has to be about the importance of diversifying an individual’s portfolio. Many people put all their eggs in one basket only to see it bottom out when the rest of the market did. The new emphasis on diversifying has led many investors to take another look at precious metals investing.

Precious metals investing has been around since almost the beginning of time. Precious metals have always been used as a form of currency or investment. This is due to their natural luster, malleability, conductivity and low reactivity. Of course, these characteristics also make precious metals valuable for very practical purposes.

“Poor Man’s Gold”
One popular choice for precious metals investing is silver. It earned its nickname, “Poor Man’s Gold”, by being a great investment that lacked the cost of gold. This allows people who want to invest in precious metals to do so without overextending themselves the same way they might if they tried purchasing gold.

The Truth behind the “Silver Crash”
In the 1990s, investors realized that silver was extremely cheap, given its potential. At one point, in 1993, it was as low as $4 an ounce. Naturally, people bought up as much of the precious metal as they could. Anyone who made that $4 investment was able to sell it off in 2011 for $45.58 an ounce.

Unfortunately, silver can be vulnerable to the same market forces of any precious metals investing. Just two years after it was selling for $45.58 an ounce, silver fell to just $18 for the same amount. Many have taken to calling this development the “silver crash.”

While the name certainly makes investing in silver sound daunting, the truth is less dramatic. Most people purchase silver or get into any other precious metals investing, for that matter, as a means of keeping their money safe from other market forces, especially inflation. Therefore, for those using silver to protect their assets, the “silver crash” was hardly noteworthy. If anything, it may have been seen as an opportunity to purchase more.

Silver’s Future
This isn’t to say silver can’t be bought as an investment to turn a profit. However, with any precious metals investing, there’s a time to buy and a time to sell or stay out. Investors interested in a profit would have stepped in a bit late if they didn’t buy silver till the early 2000s, but would have been right on time ten years prior. With prices low again, it would appear now is another good time to invest in silver to turn a profit later.

Many precious metals have received a renaissance of sorts in the past few decades due to inventions or technologies that found new uses for them. Palladium, for example, was discovered to be the precious metal needed to create the catalytic converter. When catalytic converters became standard automobile features in the early 90s, palladium skyrocketed in value. Even gold had the same assistance when computer circuit boards were developed, as they needed that precious metal to function.

Silver could be poised to receive the same boost. The push for clean energy has brought solar power into the spotlight. Solar power needs silver to function properly. In fact, about 5.6% of all the silver used industrially is in solar panels. With so many countries working on perfecting solar energy, that number could soon grow exponentially.

There are several options available for precious metals investing in silver. One of the best ways, however, is through Monex. For one thing, the company has a reputation that garners both respect and trust. Monex also offers silver in several different forms. It can be purchased as American coins, Canadian coins, as bullion and even in some forms of European currency. This variety makes silver an easy investment for people of all socioeconomic levels.

Although no one can predict what the market will do, silver will always remain a good investment from a commodity standpoint. Its affordability and the variety of forms it can be purchased in also make it an easy purchase for investors just starting out.