What is the Right Quantity of Silver in Your Investment Portfolio?

For centuries, silver has been used as a store of value, similar to other precious metals. Silver is used in various industries, with one of its primary uses being in solar energy as a conductor for photovoltaic cells. The metal also has a variety of technological applications, including its use in 5G connectivity. It is expected that silver’s industrial demand will continue to grow, particularly as the shift to renewable sources of energy gains traction.

In recent times, this industrial metal has also become a popular option for investment. However, knowing the right quantity of silver to include in an investment portfolio can be hard. Below, we look at ways to include the metal in one’s diversified portfolio as well as investment options for silver.

When it comes to investing in silver, experts recommend that precious metal investments range between 5% to 10% in a diversified portfolio. This is a general recommendation, however, and investors may tweak this, depending on their investment goals.

Investing options are often categorized into digital silver and physical silver. Digital silver primarily includes digital tokens and exchange-traded funds (ETFs) while physical silver includes bullion coins, rounds and bars.  The two options have their own pros and cons, with digital silver affording the investors liquidity and convenience of electronic trading. Unlike physical silver, digital silver is stored in a brokerage account or a digital wallet and can be sold and bought easily and quickly. This makes it a good option for investors planning to trade the metal regularly.

On the other hand, physical silver is a tangible asset that can be held in possession as well as be stored. Owning physical silver may also offer investors a sense of security and satisfaction from legally owning an asset.

Investors who would like to own both physical and digital silver can do so through several companies that offer these services, such as Kinesis Silver. It is important to note that the choice between digital and physical silver boils down to an individual’s investment goals as well as their personal preferences.

In the event of a financial crisis, most traditional investments such as bonds and stocks decline in value, which makes it important to include a safe-haven asset such as silver in one’s diversified portfolio. Silver, similar to all other safe-haven assets, protects investors from market volatility and inflation, helping preserve purchasing power as well as protect wealth.

It should be noted, however, that the metal’s value can also be impacted by economic downturns, as its demand in industrial uses may decrease. Such changes also affect stocks of the metal’s producers, such as Hecla Mining Company (NYSE: HL), in the same way that tailwinds such as instability in key mining regions result in price hikes due to concerns about supply sustainability.

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