Why Buy Silver?
Ξ May 2nd, 2008 | → | ∇ Investing |
Many silver investors buy silver or save some of their hard-earned cash in the form of precious metals. If you ask them why they have decided to buy silver they would give you a long list of reasons. If you buy silver, the silver will hold its value and serve as a hedge against inflation. One silver dime could buy a soda in 1964, a time when it was worth 10 cents. At present, silver bullion within that same coin could cost about 1.20 dollars. So, either way a soda or candy bar could be purchased now or in 1964.This is what is meant by using bullion as an inflation hedge.
Many investors buy silver as a means of keeping their purchasing power in one piece. That does not mean that the dollar value of silver always rises. Sometimes it remains stable and sometimes it drops. But over time and in especially tough times the silver will tend to hold the real buying power of their investment in a more stable way than currency does. If the investment is in a treasury bond, taking inflation into account, the value of the money in treasury bond would have decreased by 1.2% in the last 5 years. The buying power of the money would have increased by almost 59% if half of the said money would have been invested in silver. There may be overpriced purchases and so it is feasible to carry out some investigation before you invest in silver.