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Diversifying Your Portfolio With Silver Bars
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Archive for January, 2012

Diversifying Your Portfolio With Silver Bars

In today’s world, many investors are fed up with the status quo and the standard investments of stocks, bonds and mutual funds. If your portfolio only has these types of traditional investments in it, you may want to consider branching out and diversifying your holdings a bit. One way to do this is to put some of your money into precious metals like gold and silver bars. This is one of the purest types of investments and something that will never fully lose its value.

Buying and holding silver bars gives you access to an investment that will inevitably continue to increase in value over time. While short-term fluctuations have caused the value of silver or gold to temporarily decrease in value, its value has always historically trended upward. Because of this, you really can’t go wrong with holding some precious metals in your portfolio.

One of the advantages of keeping silver or gold on hand is that you get something that always has some value. Other types of investments like stocks or bonds could conceivably become worthless if the company behind them goes out of business.

If you own precious metals, you do not have to worry about this because they will always have some kind of value regardless of what type of society is in place. These items have had value dating back to the very earliest civilizations and they are still very valuable today.

Another benefit of investing in silver bars is that it provides you with a way to keep your wealth with you. You don’t have to trust it to a bank or an investment company and hope that it’s still there when you need it. Your wealth is right there for you to keep an eye on at all times. You don’t have to worry about someone spending the money or using it for something else along the way.

Investing in the Safety of Silver Bullion

With the turmoil that has been non-stop in the financial markets in recent years, many investors have opted to put their money into precious metals. Metals like gold and silver bullion are often purchased and stored as a hedge against inflation. Precious metals can be purchased in many different ways and all of them provide the investor with the chance to benefit from increasing prices.

One of the major advantages of purchasing silver bullion or other similar precious metals is that it has been a medium of exchange for thousands of years. While fiat or paper money has failed time and time again, precious metals like gold and silver have stood the test of time. They have an intrinsic value that will always be there regardless of what happens in the economy.

Because of this intrinsic value, many feel that precious metals would again become a medium of exchange if the current financial system failed. Even if banks, governments and economies fail, one could still trade with his neighbor. During the trading process, having some gold or silver bullion on hand could come in very handy. Instead of having to trade goods for other goods, the precious metals would again act as a type of currency.

Another advantage of investing in precious metals is that they operate independently of what happens in other financial markets. Because of this, many people hold precious metals in their portfolios. Instead of having to worry about what is happening in the stock market or the bond market, investors can feel confident that the value of their precious metals will remain strong.

Regardless of how you decide to invest in precious metals, it is usually a good idea to have some in your portfolio. This way, your investments will be diversified and safer from any potential economic collapse issues.

Silver Coins: A Savvy Investment in Turbulent Times

Precious metals have been a medium of exchange for centuries. For the most part, precious metals are no longer considered legal tender for industrialized nations. However, precious metals can still have a role in a well-diversified investment portfolio. There are a number of investment options in this asset class, including silver coins.

Market Ups & Downs

In a recessionary market, investors scramble to look for safe havens from volatility. For example, the Standard & Poor’s 500 Index has lost and rebounded almost a quarter of its value in the last year.

Recessionary markets are often characterized by inflation. Inflation is defined as an excess supply of currency leading to a rise in prices for goods and services. Sustained inflation inevitably leads to an erosion of purchasing power. Silver coins and other precious metals have traditionally done well in inflationary economies. The Bureau of Labor Statistics publishes the Consumer Price Index (CPI) on a monthly basis. The rate of inflation is compiled from that information. The rate of inflation for 2011 was roughly 3.4%.

The value of silver is primarily determined by supply and demand. The central purposes of silver are industrial (40%), exchange-traded products, jewelry and silver bullion coins. Comparatively speaking, the price of silver fluctuates more frequently than gold. Price volatility is attributed to less market liquidity and significant changes in industrial demand. Despite these sobering realities, the price of silver has been on a steady upward trend since September 2005. In fact, from 2005 until present, the price of silver has increased over 82%. This is in stark contrast to the anemic returns of the S&P 500 which posted a net decrease of -8.06% over the last five years.

In summary, the best way to protect your investment portfolio from sustaining sizeable losses is diversification. A proven way to diversify is to invest in different asset classes, namely silver coins.