Why Invest in Silver
Silver is one of the chemical elements. Silver's
chemical symbol is Ag and its atomic number is 49 (Gold's symbols is Au,
and it's number is 79). Silver is above Gold in the Periodic Table of the
Elements. Silver has similar characteristics to Gold. Silver is relatively
inert and malleable. Silver does tarnish. The best way to clean silver is
with mild soap and warm water and then pat dry with a soft cloth. Chemical
cleaners such as silver polish are completely unnecessary. Silver is both
an Industrial Metal and a Precious Metal. As an industrial metal Silver
has many uses. Silver has the highest electrical and thermal conductivity
of any element. Silver was critical to the photographic industry before
digital cameras. The term Silver Screen refers to the fact that Silver was
actually embedded into early movie screens. Silver kills bacteria and is
used in water filters for that purpose. New uses of Silver are found
almost daily.
As a precious metal for money Silver has no equal in its
widespread use. Silver coins are among the oldest examples of coined
money. Gold is too valuable for everyday common use historically being
worth sixteen times Silver. Silver prices are quoted in Troy Ounces.
Silver futures contracts are traded on the COMEX in New York and on the
London Metal Exchange. The Spot Price is published by the exchanges and is
derived from the futures prices. COMEX Silver futures contracts are for
5000 ounces cast into 1000 ounce bars. The vast majority of the activity
on the COMEX is done by trying to make money on price fluctuation. The
price of Silver set by the COMEX differs greatly from the Silver price
paid by individuals for small amounts of Silver coins or bars. There is a
big difference in that these small individual transactions involve real
physical Silver not paper contracts on an exchange. Thus, the Silver price
for small amounts can be as much as 100% over the COMEX price. In times of
economic uncertainty Silver can be very difficult to get as Silver is the
money of the common person. Another thing to keep in mind is the
historical ratio between the Gold price and the Silver price. Over the
long term one ounce of Gold is worth sixteen times that of one ounce of
Silver. When the Gold/Silver ratio gets far from sixteen you expect a
return to the mean. Silver price moves can be very volatile. Everything
that was said about how to think about owning Gold is true of Silver.
Silver is insurance. Persons of modest means should make Silver their
first priority. Silver is the money of everyday transactions. One ounce
bullion coins and ten ounce bars are most convenient. We reccomend that
precious metals holding ratio be thirty to forty percent in silver the remainder in gold.
Why Invest in Gold
Of all the precious metals gold is the most popular as
an investment. Investors generally buy gold as a hedge or harbor against
economic, political, or social crises (including investment market
declines, burgeoning national debt, currency failure, inflation, war and
social unrest). The gold market is subject to speculation as are other
markets, especially through the use of futures contracts and Derivatives.
The history of the gold standard, the role of gold reserves in central
banking, gold's low correlation with other commodity prices, and its
pricing in relation to fiat currencies during the financial crisis of
2007-2010, suggest that gold behaves more like a currency than a
commodity.
It's higher value per troy ounce in relation to silver makes
gold desirable for larger investments because it is more easily
transported and stored.
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