In today’s investment markets, there are plenty of new and exciting strategies capturing the zeitgeist, but let’s not forget that today’s innovative investment opportunity can be tomorrow’s devastating market crash. When it comes to safeguarding your future, tried and true investment vehicles are often the way to go. Throughout history, silver and gold have been one of the main ways people sought to capture and hold wealth, and they serve that purpose today too.
Diversifying a portfolio with gold or silver investments is a fantastic idea for many investors. Everyone has their own financial goals, limitations, and needs, so you may be wondering which is a better choice for you. Fortunately, we’re breaking down the benefits of both to help you understand whether gold or silver is the wiser investment choice for your circumstances.
Benefits of Gold
Liquidity
Liquidity is an important aspect of investing; having liquid assets that can be sold at any moment is important when you need to balance your portfolio or access cash in an emergency. Gold, as a physical product, is a liquid investment that you can sell off at any time. But if you don’t want to purchase, store, and safeguard gold coins or bars, investing in gold exchange-traded funds (ETFs) or gold mining companies gives you other avenues for investing that are convenient and adjustable.
Reliability & Stability
Due to its rare nature, gold is a relatively reliable investment. The scarcity of this precious metal makes it expensive to buy, but it helps support high demand. This higher price and demand, in turn, mean that market shifts affect gold less. A shift of a few dollars may be significant for lower-priced investments but far less so for gold. This makes it a stable long-term investment, something that many investors favor.
Countercyclical Investment
A countercyclical investment is one that rises and falls in contrast to the general market. So, when the market is trending downward, the price of gold tends to rise. This can be incredibly valuable to investors, as during times of recession or inflation, gold’s value stays steady or even increases. This can offset the losses in other investments and is a terrific way to hedge against inflation to ensure you don’t lose purchasing power.
Benefits of Silver
Affordability
If you’re someone who has fewer liquid assets or less capital to invest, then silver can be an attractive option. As a more common precious metal than gold, silver is significantly cheaper and easier to invest in for a wider range of people. While this makes silver a little less stable than gold, silver is still a generally reliable investment compared to many others out there with a legacy that spans thousands of years.
Has Multiple Applications
Rare metals typically do not have many commercial applications, but silver is far more utilized in commercial and industrial products than gold. Why does this matter? Silver’s versatility allows investors to more accurately predict the movement of the silver market based on conditions in the world and certain industries. If the demand for silver rises, so will the price.
Volatility
While some may hear the word volatility and walk away, volatility can be a good thing for certain investors. A lower buy-in and higher volatility are excellent indicators for short-term investors who are willing to take slightly higher risks. Higher volatility brings the potential for higher returns (or losses), which can be ideal for those with already stable portfolios who can tolerate the risk.
Which Is Right for You?
With all the benefits of gold and silver laid out, the question remains: should you invest in gold, or should you invest in silver? As you can probably tell by now, the answer depends on your personal situation and needs.
If you’re seeking a stable, long-term investment that protects you against the potential for loss, gold may be your better option. You may not see major returns for a long time, but you’ll have the peace of mind that comes with knowing your portfolio will stay strong even in the most trying market conditions.
On the other hand, silver is often a better choice for those with less capital or those who are willing to take an increased risk. The fact that the price is lower makes silver more accessible. Overall, silver is a decent investment and a fantastic way to diversify your portfolio, whether you are a newer investor, have fewer assets, or are keen to watch the market and take risks that gold investors typically won’t.
And of course, if you have ample funds and your portfolio is well-balanced in other ways, there is nothing to stop you from investing in both!
Keep in mind that it’s best to consult with your financial advisor before you make any investment decisions. Your advisor will be able to help you lay out your goals and decide whether investing in gold, silver, both, or neither is an effective way to meet them. Investing can be a complicated journey, so it’s best to have a professional by your side as you take it.
Trust the Professionals at Joshua Kodner Galleries with Your Gold and Silver Needs
If you’re ready to invest in gold or silver in the form of fine art or jewelry, Joshua Kodner Galleries is here to help. For over 100 years, we’ve worked with countless clients to help them find the treasures they’re looking for. Our expertise is undeniable with our top-notch appraisal services and experienced team. We look forward to having the opportunity to work with you, so contact us today!
