When it comes to precious metals, many investors wonder whether they should invest in gold or silver. Each metal has advantages over the other, and many investors don’t know which one they should choose. Of course that brings up the age-old question, why not invest in both?
There’s really no reason to choose between gold or silver when you have the opportunity to invest in both of them. If you have the opportunity and ability to invest in both of them, why not invest in both? Here are some of the advantages of investing in gold and silver, and the advantages of investing in both metals together.
Advantages of Gold vs. Silver
With a history of use as a monetary and investment metal that dates back millennia, there are numerous advantages to investing in gold and holding gold versus silver. Here are three of them.
1. Greater Recognition
Gold is one of the most recognized investment assets in the world. And when investors are looking to bring their assets to safety and protect their wealth, their first thought naturally turns to gold. Gold is easily recognizable, hard to counterfeit, and known the world over for its great value. That’s why so many investors invest in gold coins or bars when they decide to invest in gold.
2. Less Bulky
Gold’s compactness makes it a superior choice to silver when looking to buy large amounts of precious metals. $50,000 of gold coins can fit in your pocket and be carried easily anywhere. $50,000 of silver will require boxes and boxes to carry, and is bulky and heavy. This ability to store large amounts of value in a very small package is part of what led gold to become the preferred monetary metal for international trade, and helps keep gold a popular investment asset today.
3. Less Price Volatility
Gold offers greater price stability that silver, which is why it was trusted to anchor monetary systems the world over. Today, the gold price is still relatively stable, moving in largely predictable patterns over the long term. Silver investors can often get nervous looking at its price swings, but gold’s stability can help calm investors’ nerves.
Advantages of Silver vs. Gold
1. Silver Is Cheaper
Silver is cheaper than gold, which makes it an ideal beginner metal for investors. Many an investor has started off investing in silver, then eventually moving into gold. The low silver price compared to gold makes it an attractive and alluring asset for those looking to dip their toes into the waters of precious metals investing.
2. Higher Upside
When precious metals begin to rise in price, silver often tends to rise quicker in percentage terms than gold. For instance, a typical day might see gold rise $15, but silver might rise 50 cents. At current prices that’s about a 2% gain for silver, but only an 0.6% rise in gold.
During the aftermath of the 2008 financial crisis, gold nearly tripled in price, but silver nearly quadrupled in price. Investing in silver before a major upswing could result in bigger gains.
3. More Choices
Because silver is cheaper, investors will often have more choices of silver products to invest in. Silver coins are minted by mints around the world in a wide variety of sizes, while silver bars are available in a multitude of sizes, from 1 gram all the way up to 1,000 ounces. That gives silver investors the ability to tailor their investments to their needs.
Advantage of Investing in Both Gold and Silver
Of course, investing in both gold and silver can give you the best of both worlds. You can benefit from the price stability and long-term growth of gold, while still being able to benefit from silver’s ability to outpace gold’s short-term price growth. And, most importantly, you’re bringing much-needed diversification to your investment portfolio.
Maximizing the diversification of your portfolio can help reduce the risk profile of your investments. After all, you wouldn’t just invest in one stock, one bond, or one mutual fund, right? So why invest only in one precious metal?
Both gold and silver can help protect your assets against inflation, currency depreciation, and financial turmoil. Their performance during financial crises is well-known, as the 2008 crisis and its aftermath demonstrated. How many thousands of investors looked at the performance of gold and silver during those years and wished they could take a mulligan when making their investment decisions?
Many of those investors learned from their experiences during the financial crisis, vowed not to subject themselves to those massive losses again, and are protecting themselves with gold and silver this time around. And with more options to invest in gold and silver than ever, there’s no excuse for investors not to protect their assets with precious metals.
One investment vehicle that more and more investors are turning to is a gold IRA. With a gold IRA, investors can benefit from the same tax advantages as a conventional IRA, but invest in physical gold coins and bars. They can even roll over assets from existing 401(k), IRA, TSP, or similar retirement accounts into a gold IRA, normally without tax consequences.
For those who want to invest in silver, a silver IRA offers the same characteristics as a gold IRA, only it’s geared toward investing in silver. And for those who want to invest in both gold and silver, a precious metals IRA that holds both gold and silver may be just the ticket.
If you’re looking to protect your assets with precious metals, isn’t it time to start looking into a gold or silver IRA? Time is of the essence, as if you’re relying on existing retirement assets you’ll want to do your rollover before stock markets collapse, and before gold and silver skyrocket. Now’s the time to start taking concrete action to protect your assets and ensure that you ride out the coming recession with the fewest financial losses possible.
is America's Gold IRA Expert, CEO of Goldco Precious Metals, and holds a position on the Los Angeles board of the Better Business Bureau.
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