The Pros, Cons of Investing in Silver

The demand for silver often increases in times of financial uncertainty, as the metal is regarded as a reliable store of value and a safe-haven asset. Below, we look at the pros as well as cons potential investors should consider before investing in silver.

Main advantages of investing in silver

  • You have different options for investment

Potential investors who want to invest in silver can choose to buy stock in silver mining companies, purchase physical silver, or buy silver IRAs or silver ETFs, among other options.

  • The metal has more earning potential

The price of silver has a history of being more volatile in comparison to the price of gold. Heightened risks offer opportunities for greater rewards.

  • The metal is more affordable

In comparison to gold, silver is more affordable. This makes it more accessible for investors who have smaller investment portfolios. Currently, the price of silver sits at $23.50 per ounce. This is quite an affordable sum, especially when compared to gold’s price of roughly $1,950 per ounce.

  • Silver is linked to industrial demand

Silver has many industrial uses, which means its price is affected by industrial demand. Consequently, its value can increase as the value of other precious metals decreases.

Main disadvantages of investing in silver

  • The metal linked to industrial demand

Lower demand for silver can cause the metal’s value to decline as the value of other precious metals increases, which works against silver investors.

  • Higher risk

While this metal does offer the potential for higher returns, silver’s price volatility also offers a higher risk for losses.

  • Physical silver requires security and storage

Investors who want to purchase physical silver will need to part with more funds to cover transportation, storage and security costs.

  • The metal does not generate income

Unlike other assets that generate income for investors through cash flow, interest or dividends, silver doesn’t generate income.

So, when should you invest in silver?

PinnacleQuote Life Insurance Specialists founder Danny Ray recommends investing in silver during periods of high industrial demand or economic downturns, when the metal can be used as a store of value. He advises potential investors to avoid the metal if they prefer less volatile investments.

It should be noted that whether or not silver is a good investment for you depends on different factors, including current prices, the amount you want to invest, current events, your tolerance for risk and your investment timeline.

Potential investors are advised to solicit a financial advisor’s services to further explain the potential risks and benefits of investing via different alternatives such as ETFs, company shares such as those of Eloro Resources Ltd. (TSX: ELO) (OTCQX: ELRRF) or buying physical silver.

NOTE TO INVESTORS: The latest news and updates relating to Eloro Resources Ltd. (TSX: ELO) (OTCQX: ELRRF) are available in the company’s newsroom at http://ibn.fm/ELRRF

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