Investing in silver - coins and bars in background

Investing in Silver

You Can Protect Your Future By Investing In Silver

The stock market is notorious for its unpredictability. Even the best programs and expert investors are caught off guard when disasters like the Covid pandemic shake up the market. Some investors thrive in these high-risk scenarios, but the majority would prefer a more safe and reliable method of investing. This is particularly true for people who are investing for their retirement. They aren’t looking for big gains in a short amount of time. They are looking for long-term, low-risk opportunities that will help them through their later years.

A precious metal IRA is a great way to reduce risk by reducing your reliance on the stock market. Many investors turn to precious metals like silver and gold because they are ideal long-term investments that are almost guaranteed to increase in value. At the very least, they provide a much-needed source of diversification and can hedge against artificial losses caused by inflation.

Investing in silver for retirement does require some additional steps. A traditional IRA is not capable of storing physical commodities like precious metals. This requires a unique, self-directed IRA that allows investing in a larger array of assets. Some of these IRAs are even capable of handling resources like BitCoin and other cryptocurrencies. Nearly all other aspects of the account are the same as a traditional IRA.

These accounts may allow for numerous additional assets, but their primary focus is almost always precious metals. Gold, silver, platinum, and palladium are the most common precious metals found in these accounts. Each of these metals is slightly different and a diversified account may have some of each. Many investors begin by focusing on gold because its value is easy to understand. However, while not as valuable as gold, silver is also an excellent investment for new account holders.

Silver Is High Value And Low Risk

Stack of Bank Silver Bars extreme closeup

One major advantage of silver (and other precious metals) is that they are a physical asset with real value. And that value is fairly high compared to many other commodities. Silver cannot be printed or created by the government. There is a limited supply, a high demand, and it is considered valuable across the globe. Other assets, including paper money, can be created as needed and thus suffer from depreciation. Silver doesn’t have this problem.

Stocks and bonds come with a serious risk known as default risk. Default occurs with the issuer of the bond goes bankrupt. They are then unable to pay investors what they are owed. A company can go bankrupt and destroy the value of your investment in only moments.

Defaults can also create a domino effect that causes other companies to default and even more money to be lost. In a “worst-case scenario” this could cause a collapse in the stock market that results in the loss of billions or possibly trillions of dollars. The good news is that physical silver does not have any default risk. The value of your silver is not tied to the success of a particular company.

Counterparty risk is a similar form of risk that applies to many investments found in a traditional IRA. It represents the chance that another party involved in the investment will not fulfill its obligations. Once again, the physical and independent nature of silver frees it from this type of risk.

Fast Gains During Economic Turmoil

The stock market is no stranger to financial disasters. Whether it’s the financial crisis of the 1970s or the stock market crash of 2008; extreme economic disasters are bound to happen time and time again. Traditional investment accounts will struggle to make it through these occurrences. Precious metals, on the other hand, will actually increase in value.

Gold, silver, and platinum all tend to increase in value during an economic collapse. What’s more interesting is that silver often has the biggest increase in value. For example, during the 1970s the value of gold climbed to 2500 percent. During this same period, the value of silver increased by 3800 percent. The actual value of the silver may have been lower but the larger increase means a higher return on your initial investment.

How Much For Investing In Silver

Precious metals are definitely a smart investment, but it’s still important to maintain a diverse portfolio with different types of assets and varying levels of risks. Dumping all of your retirement funds into silver may not be the smartest move. Instead, try following the advice of financial experts who generally recommend investing between 5 and 10 percent of your funds in precious metals.

You can get the most out of your funds by working closely with a reputable financial advisor or investment company. Well-trained experts can help you properly diversify your profile even among different types of precious metals. It’s also important to find a trustworthy company that provides precious metal IRAs. Not all IRA providers are created equal and some of them are only interested in making a dollar. With the right provider and the right advisor, you can make the right investments to protect your future

Written by
Nathan Tarrant
View all articles
Written by Nathan Tarrant