When seeing the price of sister metal gold soaring, some investors may wonder if silver, as another precious metal, is a good investment choice and if it is appropriate to buy silver now.
Although the silver market is smaller and less attention-grabbing compared to gold, it is indeed a reliable option to include silver assets in an investment portfolio in terms of its investment value.
Silver, like gold, is a form of currency
Although silver is not a commonly used currency in our daily lives, it still possesses the characteristics of currency. In fact, just like gold, silver is the ultimate form of currency because it is not created out of thin air, which avoids the possibility of depreciation like paper currency or electronic currency. Gold and silver, as true assets, have served as currency for thousands of years. As the popular book “Investing in Gold and Silver” says, “For thousands of years, gold and silver have repeatedly proven their value, forcing paper money to prove itself.”
Silver has a low price and a lower investment threshold
If I told you that you can buy a hard asset at a price that is 1/70th of the price of gold and it can withstand various crises just like gold, would you want to know what that asset is? Yes, it’s silver. For ordinary investors, silver is more affordable. If an ounce of gold seems too luxurious to you, then silver is the perfect investment choice for you.
Silver is an effective diversification tool for investment portfolios
Silver is an effective diversification tool for investment portfolios and should be a distinctive component of any investment portfolio. It can preserve value in the long term and provide a buffer for your investment portfolio during unfavorable market conditions. In times of stock market crashes, if you have overinvested in high-risk financial instruments, silver assets can hedge some of the losses. History has shown that during stock market crashes, silver prices usually rise, and this is not a coincidence. Having a portfolio that includes both gold and silver helps offset stock market losses and provides a source of alternative funds for reinvesting in undervalued stocks during economic recoveries.
Silver outperforms gold in bull markets
Silver is a smaller market, and in fact, even a small influx or outflow of funds can have a much greater impact on its price compared to other assets (including gold). This greater volatility means that silver’s performance is not as good as gold’s in bear markets. However, in bull markets, the increase in silver prices can far exceed that of gold.
To give a more recent example, we know that the price of gold rose 166% from its bottom in 2008 to its peak in 2011, but during the same period, the price of silver rose by 448%. We can almost predict that silver will continue to outperform gold in this bull market.
Industrial demand for silver continues to grow
You may not believe it, but in reality, there is not a single product we use every day that does not contain silver. Among all elements, silver is the most indispensable metal. It has the highest conductivity, the highest thermal conductivity, and the highest reflectivity. From electronics and medical applications to batteries and solar panels, almost every major industry uses silver. Whether you can see it or not, silver is truly everywhere. Without silver, modern life would not function properly. Due to these unique properties, silver’s industrial applications are becoming increasingly widespread. In fact, industrial demand accounts for over half of all silver demand.
So, should you invest in silver?
The overall consensus among traders and market experts is that silver has great long-term upside potential. Unlike many other asset types, silver is supported by increasing industrial use, and the downside risk is relatively limited. It can be said that it is the preferred metal for novice investors. In the long run, silver will maintain its strategic importance and can hedge against various market events that may imply economic downturns.
Trade silver on the preferred 4E platform
As a leading global financial asset trading platform, 4E offers trading of nearly 500+ financial products, including forex, cryptocurrencies, US stocks, commodities, indices, and more. Among them, silver derivatives support leveraged trading with up to 200 times leverage, with a minimum tradable volume of 0.01 lots, low thresholds, and low spreads. You can open a position to buy silver with just 3 simple steps and start your silver investment journey!
As the global partner of the Argentina national team, 4E’s security and reliability are widely recognized in the industry, ensuring the safety of funds. Over two million users worldwide are using the 4E platform. The 4E platform supports trading on both computers and mobile apps, with a simple and intuitive interface and 24/7 online service, allowing you to get assistance anytime, anywhere. It is the ideal choice for investing in silver.
