Alternative Investing in Silver: Why It’s a Great Precious Metal Choice for Investors

Five Reasons Silver is a Brilliant Alternative Investment

Entering the precious metals market as an alternative investor or saver is almost always a smart move, provided you remember to follow a few guidelines. Many financial pros say it’s a good idea to keep about 10 percent of your portfolio in either gold, silver or other precious metals like platinum and palladium.

Those of us with a penchant for alternative investing strategies tend to bump that number up to around 25 or even 50 percent. But before you leap into this exciting, and potentially very rewarding sector, make sure you have a firm grasp on the basics of becoming a small “player” in the world of the shiny stuff. And keep in mind that silver, among all the metallic choices, has the best upside potential for those interested in long- or short-term gain.

Here is a brief list of what you should know before building a precious metals portfolio:

Silver has the best upside potential

While gold and platinum are popular choices for millions of individual and institutional investors, silver stands alone as the metal of choice for several reasons. Even starry-eyed gold lovers admit that even in the farthest-out scenarios, the metal will at most double or triple in value. One reason for that, and there are many, is because gold already sits well above a thousand dollars per ounce and is considered much less volatile than silver.

That means if traditional markets take a pounding, and send everyone scurrying for gold and silver, the price of silver has much more room to rise compared to gold. Currently hovering at about $16 per ounce, silver could easily quintuple in value if a severe financial crisis came to pass. Many hypothetical “state of emergency” scenarios for the U.S. economy show gold tripling in value but silver rising as much as 500 percent.

If you are shopping for an alternative investment vehicle that has massive upside and not much downside, silver has gold beat by a mile.

You can buy a lot of silver for a reasonable amount of money

As of this writing, an ounce of gold is priced at about $1,160, approximately 75 times the per-ounce price of silver. If you are looking to augment your metals stash with $5,000 of spare cash, you’d be able to purchase less than 5 ounces of gold, but about 300 ounces of silver! For investors who want quantity as well as quantity, silver is the way to go. By the way, the 4-plus ounces of gold would fit in the palm of your hand, in the form of several coins each the size of half-dollars.

For “stackers” and “accumulators,” the clever names given to those who amass large amounts of silver over a long period of time, the 100-ounce silver bar is a point of pride. It’s also a smart way to acquire a decent amount of silver at a minimal markup. Dealers usually sell their “hundreds” for very close to the spot price, which is just one reason they’re so popular. They also look amazing and weigh in at 6.8 pounds. Their physical dimensions are stunning, at 5.5 inches long, by 2.5 inches wide, and once full inch thick. For less than $1,600 at current prices, you could jump-start your position in the precious metals market with a 100-ounce brick of pure silver.

In a real crisis, silver is a smarter means of exchange 

In a seriously broken economy, where paper money has no value and citizens are using precious metal as a means of exchange, gold would not be a good way to buy food or supplies. Consider that just a quarter ounce of gold might be worth $1,000 in dire circumstances. That’s a coin the size of a nickel. How do you buy $50 worth of goods with such a high-value instrument? Silver to the rescue! In that same situation, you could use small silver bullion pieces, a quarter ounce for example, to buy reasonable amounts of goods and services. Even at ten times its current price, a quarter ounce of silver would be worth about $40. 

Silver has intrinsic and industrial value 

Much of gold’s value is psychological, unrelated to its limited industrial uses. Silver, on the other hand, besides its power to attract human attention, has massive industrial applications, most of which are expected to rise as solar and alternative (non- oil based) energy sources become more widespread. The case can be made that a century from now silver will be the dominant precious metal as the base of the world’s economy. 

Want anonymity? Silver is the metal that tells no tales 

Even in states that require photo ID for large metal purchases, investors buying just a few hundred dollars of silver at a time are virtually invisible to the surveillance economy. Buying even a few ounces of gold can trigger all sorts of record-keeping requirements, even for small coin dealers. If you want total anonymity, silver is the best route for building an alternative portfolio.

Remember that investing is precious metals means purchasing the actual metal, not a silver or gold stock. The latter are nothing more than another type of traditional “paper money” with zero intrinsic value. If Wall Street crashes, your gold or silver stocks will be awfully hard to sell. Gold and silver bullion and legal tender coinage is the way to go.

Practically every city in the U.S. has at least on local coin shop that sells silver and gold metal coins and bullion pieces. And for those who live “in the sticks,” there are at least a dozen reliable online sellers. Keep in mind, however, that online purchases will leave a paper trail if you are concerned about such things. Face-to-face transactions with local sellers require no documentation in most states.

So, the next time you are looking to park a few dollars in precious metals, consider buying a few, or many, ounces of silver. At $16 per ounce, you can start building your precious metals portfolio even on a budget. Alternative investing in silver is the best choice among precious metals. Good luck, and happy investing.