Buying Silver is a Safe, But Volatile Investment
As an individual or investor, you are taking a wise decision when buying silver. We are in a severe financial crisis: governments are not able to pay back their debt, there are massive bank runs around the world, and there is social unrest in many Western countries. In short, the banking system and governments are running a systemic risk. This is a historic moment, as the fundamentals to buy silver and gold have never been better than now.
Making a silver investment
While both gold and silver can preserve your wealth, buying silver in particular can increase your wealth. That’s because silver is much more volatile than gold. The silver price can move up aggressively. The flip side however is that the silver price can move down quickly as well. So investing in silver is not for the faint-hearted.
Why is this an exceptional time to buy silver?
Every investor should keep a close eye on a couple of important parameters. First, people are investing currently the same amount in silver as in gold (expressed in a currency), while the silver price is currently 50 times cheaper than the gold price. While there is 6 times more silver available for investment than gold, people are buying silver at a 50-to-1 ratio. Yes indeed, we are moving to a point where there will be a physical shortage of silver. When applying the natural law of supply and demand, you can imagine what will happen with the silver price and your silver investment at such a point.
Next: the gold/silver ratio (simply the gold price divided by the silver price) is, at the time of writing (May 2012), 52 to 1. That’s a very high ratio historically. The ratio has a natural tendency to move towards 30:1 or even 20:1. From that point of view, making a silver investment now could make for a good investment when this ratio adjusts over time. We are not saying that the ratio will for sure reach 20 to 1 in the short run, but based on a reliable historic average, we can expect with a high probability that the silver price has much room to move upwards in the years ahead.
Check these recommended companies when making your silver investment
For individuals or professional investors seeking to make a silver investment, we’ve created a listing that contains only trusted companies : buying physical silver (bullion), buy silver coins or get involved in a silver investment fund.
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