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Why Silver is a Good Place to Start Investing

Published on 1/5/2022 by APMEX

Various stacked Silver coins on a black background.

Investing is the act of purchasing something with the intention to make more money by selling it at a later point in time, while still maintaining ownership over whatever item or financial instrument you invest in (like stocks and bonds). Investing in Precious Metals like Silver can help offset some risks that come with investing in stocks and bonds by offering tangible value that requires little maintenance over time and has no monthly fees.

So, where do you start? As an investor, it can be difficult to know what Precious Metals to begin investing in. You want to be diligent about your decision, but you also want to make the most viable financial decision that best suits your own needs.

Investing requires a healthy amount of research. Making the wrong decision has the potential to be financially devastating, but the right decision can also be vastly rewarding. It is important to stay up to date o Silver spot prices.

Adding Precious Metals can be an excellent way to diversify your portfolio. While it is important for investors of all types to have multiple sources of income, investing in metals like Silver can also help you hedge against inflation and other factors that may impact the market.

Silver has served as a form of currency around the world since ancient times because it was one of the few items available with a relatively stable value throughout history.

In addition, Silver bullion's affordability makes it more accessible than Gold or Platinum, two precious metals which are typically considered higher on most people's lists when they begin investing. While some would consider physical Silver to be lackluster compared to Gold bullion, others might say that having something more easily attainable could make it easier for the average person to start their Precious Metal portfolio.

If you are a novice Precious Metals investor, Silver products can be a good place to start your journey. Gold, Platinum and Palladium are good Precious Metals to own, too, but Silver offers benefits that the other three metals do not: flexibility, affordable prices and increasing industrial use.


Why Buy Silver?

Silver is a good starting investment for novice investors for various reasons.

Flexibility

There is specific flexibility when it comes to Silver. Whether that comes in the form of Silver bars, coins or rounds, investors have a wide selection to choose from. The selections come in various themes, commemorative sets and private branding that set these products apart.

Silver is also relatively affordable. It's important to remember that the quality of Silver products you buy will be directly related to the price, but there are some great deals out there on popular items like American Silver Eagles and Canadian Maple Leafs. So while it makes sense for investors with larger portfolios to invest in more expensive Gold options, novice investors can start small with Silver options.

Silver Spot Price

Historically, the price of Silver is lower than all other Precious Metals. The lower price point does allow financial flexibility for investors so they can build their portfolios and financial standing. It is also a good alternative to traditional stock market investments. It's more accessible than Gold, Platinum and Palladium but offers many of the same benefits including hedging against inflation and holding its value over time.

Mintage, branding and grade are all factors in determining the cost of Silver coins and rounds. For example, an American Eagle one-ounce coin can run between $15-$20 while rounds generally range from about $0.75 to around $50--when they're not sold out, at least. Coins that are graded by top-tier grading services like NGC and PCGS also have added value.

Investors have a variety of Silver bullion to choose from at different price points to give options on what they want in return for investing in Precious Metals.

Increasing Practical Usage

Demand for Silver for its industrial use has increased. One of the biggest reasons why you might want to buy Silver is because it's used in various ways around the world, which means that as demand for products made with Silver increases, so does its worth.

The demand for Silver is not only driven by the production of electronics but also its use in various other industries. For example, medical technology now relies on Silver for sterilization purposes and solar panels are made with thin layers of Silver to increase their efficiency. As industry demands change, so will the Silver spot price.

Industrial applications have increased this metal's worth even though it may be lower up on the list of Precious Metals. And while it may not be worth as much per ounce, Silver still has value based on its industrial demand and production alone.

With all this talk about various products that require Silver to function properly, you might wonder why there is such a big difference in price between Gold, Platinum or Palladium bullion and Silver. The simple answer is supply and demand.

Gold, Platinum, Palladium are typically found in the earth together; while Silver can be mined alone or found mixed with other Precious Metals like Gold or Copper (known as "telluride minerals"). There simply isn't enough Silver to go around which drives up its price per ounce. This means that although Silver may not be worth as much based on the ounce, it's still a valuable commodity for investors and consumers alike.

Investing In Silver: Key Takeaways

Each type of investment has different benefits depending on your needs and preferences. For example, coins may be more aesthetically appealing to some investors while others prefer the ease of buying rounds for their lower premiums over spot price, or price per ounce than bars do - but this will vary based on Silver's availability as well.

A coin's historical significance can make it more collectible, and therefore more valuable to those who are more interested in collecting. Additionally, a graded coin can hold greater collectible value when looking to turn around and sell your coin, which is another aspect of investing and collecting Silver to keep in mind.

One thing that is consistent across Silver investments regardless of form or cost is that they are all considered Precious Metals with intrinsic value because of their various uses; including currency and legal tender, jewelry and decoration and industrial use like conductors in solar panels and medical sterilizers.

As mentioned before, Silver has been used in various applications since its discovery and, even though these advancements have existed to make our lives easier or more efficient, it still requires large amounts of Silver. This consequently affects Silver spot price and availability. This means it's worth taking advantage of low prices now while you can so that you will have a valuable commodity to add to your future investments.

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