Gold vs Silver: Pros and Cons

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Gold vs Silver: Pros and Cons

 

With uncertainty in the world market growing with each passing day, it is not long before investors start to look for safer alternatives. Gold and silver are two of the safest investment choices in the market today and have been so historically. In times of uncertainty, these two are often the first choices for investors looking to safeguard their investments.

 

Both these precious metals have their own benefits and drawbacks. Much like the Australia vs England cricket rivalry, people on each side of the fence both have pros for investing in and cons for not investing in the other and vice versa. This article takes a look at some of the Pros and Cons of investing in each Gold and Silver.

 

Let’s take a look at silver first.

Silver: Pros:

·       Healthy Rate of Return

One of the reasons most people invest in silver is simply to make money off its sale after a period of time. Investors study the market technically and religiously. The price fluctuation in silver is often uneven, there are high highs and then low lows, investors who have a keen eye can make lots of money off it. Through constant research and experience, investors will break the bank.

·       Helps Diversify investments

Every investor needs to diversify his investment; it is a proven fact that you should not put all your eggs in one basket. Diversifying investments from stocks to silver for example helps because precious metals have a low correlation which means even if other investment options may be declining, chances are silver would be rising.

Silver: Cons

·       There are better alternatives in the market

The two pros of investing in silver i.e. a healthy rate of return and a diverse investment are both available in other more precious metals such as Gold. Gold for example offers a high rate of return and is also a chance to diversify investments. Why would someone want to go for silver when they can go for an even better alternative?

 

Let’s take a look at Gold.

Gold: Pros

·       Not Enough Supply

What makes gold more elusive than other precious metals? The fact that there are only scarce deposits of it around the world today, make Gold an elusive commodity. Unlike shares that can be supplied into the market if and when needed, gold is hard to supply and therefore the price of gold is more stable and secure at a high pedestal.

·       Safe haven

This is perhaps the reason that makes gold worth the investment. Almost all of the countries around the world have sizeable reserves of Gold because it is a currency all on its own, not directly related to any other currency in the market. Investing in gold means you can store value especially in times of economic distress.

Gold: Cons

·       Dead Money

One of the drawbacks of investing in gold is that it can be dead money. While it will protect the value of your investment, unless the market faces uncertainty and gold prices increase, the price of gold only appreciates slightly with time. This is unlike stocks that can with time yield dividends.

The choice of which precious metal to invest in and which one to leave is the investors, make sure you consider these pros and cons before making your decision.

 

Other Reasons To Invest In Gold Or Silver

An investor can secure his savings against monetary devaluations; he can protect his purchasing power even if inflation is rising steadily; he can secure his wealth and portfolio if there’s an economic problem in Europe, US, or China-he will be safe if there are government actions that are out of his control such as excessive debts; and an investor should invest in gold or silver because the trend is a friend, and we should understand the trends as early as we can.

Learn more about investing in gold and silver and be more financially and emotionally secure. We should also share the disadvantages and benefits of investing in gold or silver to people we care for.

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About the Author:

The author, Alban Guillemot, is a brand specialist at Gold bullion Australia