Precious metals belong in every investment portfolio. They are like an insurance policy for your savings. Whenever higher-growth markets like equities take a nosedive, high demand pressures gold and silver prices higher. The savvy investor always sets aside some portion of their portfolio for the precious metals that can get them out of a bind and re-finance their recovery.
Not all precious metals are equal. Although silver prices tend to follow gold, the metals don’t behave exactly the same. It can leave you wondering which one is best for you.
Why You Should Buy Silver
Silver is a bargain right now. Analysts believe that gold has been doing well and stable prices reflect the fact that the commodity is around where it ought to be at the moment. It’s a very different story when you come to silver, which seems to have a lot of built up tensions as supplies grow scarce. Futures investors have very little long-term downside, a promising signal.
Many argue that due to its higher upside, silver is a better buy for value investors who want to see appreciable returns on their investments right now. Many investors are looking forward to the breakout in prices already.
One major downside to the metal is that it may be treated differently from gold when it comes to taxes. For example, in the UK, VAT still applies to silver, whereas gold is VAT-free and treated much more like an investment vehicle.
Before you invest, find out where to get silver bars at the lowest possible premiums. The past few years has seen a major influx in reputable online silver sellers, where you can find coins and bars from around the world.
Why You Should Buy Gold
There fewer than 200,000 tons of gold bullion in the world (although some estimates say there’s more). Gold can be an excellent investment to make if you are a high net worth investor and silver is just impractical. The thing about bullion is that you have to cover storage costs, and money invested in gold takes up a lot less space. By contrast, that also makes silver a great idea for those with less to spend.
Gold is widely acknowledged as more stable and secure than silver. If safety and wealth-preservation is your goal, stick to the yellow metal.
Why You Should Buy Both
In the end, the right answer is up to your financial situation, preferences, and comfort level, but if precious metals are right for you, you should probably have some balance of both.
Silver can give you a higher upside, whereas gold provides you with the stability that attracts so many investors to metals in the first place. Balancing the two against each other will cover you on either side.
The general guideline for precious metals is that about 5-10% of your portfolio should be dedicated to them. For the past several years, gold has simply performed better and it may always be a superior store of value, though that’s what has made the alternative an appealing opportunity for those who are eager to take on more risks. Whichever way you decide to go, make sure you don’t neglect precious metals in your investment portfolio.