In this article, I am going to elaborate my point on precious metal investing by talking about Silver and it’s importance.
I wrote an article earlier that emphasised the presence of Gold in investment portfolio.You can check that out here.
Gold is a wonderful investment option, but in my humble opinion Silver makes far more sense to invest in if you have budget constraints.
Investments in Silver should reap al the benefits usually associated with precious metals with significantly lower budget.
Let go into the details…
Silver is GOD’s Money!
Robert Kiyosaki, the author of Rich dad poor dad always emphasised the importance of God’s currency i.e Gold and Silver.
Silver is a physical metal that will make it’s possessor wealthy as it cannot be devalued by a central agency like currency.
Our currency is a form of fiat money that is bound to loose it’s purchasing power with time and with inflation.
Moreover, in times of financial warfare, currency cannot be trusted at all.
The above data corresponds to 2017 and hence may not be completely accurate today, but it will serve for the purpose of explanation.
All these countries,listed above are experiencing chronic inflation, which has cannibalised the value of their currencies!
The people of these countries would be well-off if they possess Gold/Silver or other form of useful good than to hold any currency.
Silver is indispensable for Industry
Though Gold has an important role to play in the industry beside just being a “Noble Metal”, but it silver that tumps gold as far as industrial importance is concerned.
Silver is used in wide-ranging industries and is crucial for manufacturing of a variety of industrial goods.
Silver finds it’s use in Hospitals, Automotive plants, Solar panels and technological implements, Batteries, Jewellery, Dental appliances. e.t.c.
You don’t believe me? Let me throw some statistics that will leave you struck with awe.
According to the data compiled by Thomson Reuters of the total Silver demand over the past decade, more than 60% has come from the industry!
Jewellery and coins make up for the remainder. This is in stark contrast to that of Gold, which is mainly valued because of it’s ornamental value.
With the advancement of renewable energy, demand for solar panels is expected to rise exponentially over the next decade, sharply increasing the value of this shiny metal.
Automative Robots and cars are going to shape our future economy. I bet you must have heard that somewhere. After all AI is everywhere in the news. Silver is used in many such automative industries and thus, Silver demand is going to be illustrious.
People say that the future belongs to smartphones, robots and autonomous cars, well, I say the future belongs to Silver!
Isn’t it insane! The above statistic predicts almost an exponential increase in silver demand from the dominant tech sectors.
Folks, no need to get overwhelmed by all these statistics. In simple terms as the demand is strong and growing , there is only one direction silver can head to..you guessed it right upwards.
It therefore makes a lot of sense to accumulate silver for this very basic reason, if not anything else.
Silver Reserves are depleting
As I said earlier, the demand of silver is going to skyrocket in the future because of its excellent electrical properties.
But this should also worry us a little as the available reserves of this metal are limited on our planet.
As per the latest statistic, Silver inventories are falling fast and as it cannot be replenished naturally, we should strategically accumulate what is available.
I understand that FOMO (Fear of Missing Out) never really works in investing. I Completely agree by that.But I am not asking you to put all your hard earned money on Silver either.
My goal is to sensitise you on the importance of including it in your portfolio.
Have a look at the government Silver inventories level. There has been a steady decline since the past decade and a half.
Not only the inventories are falling, the supply of Silver has also began to show signs of demand pressure.
First, Have a Look at the major Silver producing countries taken from statistia
Now just glance the supply graph.Notice the drop in the supply from 2014 onwards.
To visualise properly I have put the world map below with Silver producing countries highlighted by their reserve exhaustion.
This will help you digest the statistics much better.
Finally, Silver is Way cheaper than Gold
Needless to say that the points presented above clearly favours investing in Silver. Still if you have any doubt, do note the fact that silver is a HIGHLY UNDERVALUED METAL.
The Gold to Silver ratio, which is a ratio obtained by dividing the price of Gold with the price of Silver has been over 60 for most part of the century. So it is a hell lot easier to buy Silver to safeguard your portfolio than it is to buy Gold for the same purpose.
Also Since Silver is undervalued, it usually gives great returns during Bull markets that will put the yellow metal to shame,.
you can find out more about silver returns from the website here.
That’s it folks, Hope I was able to help you a little in whatever way I can.
Have a great investing future and stick to this website for more such articles.