Investing in Silver

Investing in Silver

Silver is a precious metal and has been regarded as a form of money just like gold and store of value. However, since the end of the silver standard, silver has lost its role as legal tender in the United States.

In 1971, the President Nixon has removed the gold standard and the silver standard and after that the US Dollar is just the tender. Modern Money is backed by the full faith of the governments around the world but does not have any intrinsic value in it.

China is the largest consumer of Silver since several centuries. However, recently China has started motivating their citizens to invest in silver. This may be because of the money printing activity of the US Government. Recently, the federal reserve has increased it’s monetary base from $ 800 Billion to $ 2 Trillion. In other words, the US Government has printed almost $ 1.2 Trillion out of thin air only.

And there is a potential danger that this will dilute the purchasing power of the existing money in the circulation. China is the largest holder of UD Treasury Securities. This means that China will be affected the most in terms of purchasing power because of the money printing activities of the US Government.

And that’s why the Chinese Government has started motivating their citizens to start investing in Silver.

US $ 5 Silver Certificate

American Silver Eagle Bullion Coin

How to Invest in Silver? -

There are various forms in which you can store the silver. Here are the various methods of  investing in Silver.

- Bars
- Coins
- Rounds
- Exchange Traded Funds
- Certificates
- Accounts
- Derivatives
- Mining Companies
- Spread Betting

You can invest in silver from the any of the above ways. According to many global investors, right now the silver price is undervalued and it will go high further and thus it’s the best time to buy silver at low price. Because you will never find silver at such low price.

Investing in Gold

Investing in Gold

Let us today discuss something about the gold investment. Gold is the precious asset class since the history of mankind and the gold was the real money before 1971 worldwide. Yes, the US Dollar and all the major currencies of the world were backed by the gold before 1971.

But after 1971, the President Nixon of USA has removed the gold standard and the US Dollar has become a free float currency and after the gold price has been rise from just $ 15 an ounce to $ 1000 an ounce today in 2010.

This is because the more money the governments and the central banks from all around the world will print and push in the economy, the purchasing power of the existing money (& the newly printed money) will be diluted which drives the commodity prices (Gold, Silver, Oil) higher to the sky.

Since past 5 years, gold has appreciated in 2 digits. Gold has given 2 digits return in the past. India is the largest consumer of gold around the world.

Gold in Portfolio -

Previously the preferred Asset class for any portfolio was Equity & Debt. But in the global financial crises, the paper assets are becoming worthless and gold has taken place in the portfolios of many smart investors. This is because the gold is hedge against the inflation. The gold can beat the inflation very well and give excellent returns in the long run.

However, any portfolio’s Gold allocation should not be more than 10% of its Total Net Worth. Remember, the gold is not for the Capital Gains but it is only to beat the inflation very will. In the long run, Equity has given highest return than any other Asset class in the world.

How to Invest in Gold? -

The obvious question is that, How to Invest in Gold? How many ways you can invest in Gold? Well, broadly there are 2 basic forms of investing in Gold.

01) Physical Gold (Gold Jewellery, Bars & Coins)
02) Demat Gold. (Gold ETFs or Paper Gold)

You can invest in Gold in the various above forms.

Gold Mutual Funds Versus Gold ETFs -

Gold Mutual Funds & Gold Exchange Traded Funds (ETFs) are both the different things. Gold Mutual Funds mainly invest in the Stocks of Gold mining Companies from all around the world while the GOLD ETFs actually invest in physical gold on behalf of you.

Physical Gold Versus Demat Gold -

There are several advantages of investing in the Demat Gold (Gold ETFs). Such as No Wealth tax on Paper Gold, Nothing to worry about Security of the Gold, you can sell it on the stock exchanges any time and many more.

Thus, Invest in Gold. Put the Gold in your Portfolio. Give the Gold a Place in your Portfolio to stabilize it against the wild fluctuations…!!!