
Bullion
is the basic commodity traded in the precious metals market. By adding
precious metals in general, and silver in particular, to a portfolio of
stocks, bonds and mutual funds, an investor is introducing a tangible or
real asset to the asset mix. This increases the degree of
diversification and protects the portfolio against fluctuations in value
of any one asset type.
Economic Forces
The economic forces that affect the price of precious metals are
different from, and often are opposed to the forces which determine the
price of most common financial assets. This independent movement of
precious metals to other financial assets can reduce overall portfolio
volatility and contributes balance.
Protection Against Currency Depreciation
The purchasing power of most currency has steadily declined over time
and is expected to continue to do so. Precious metals can often provide
a "hedge against inflation" capability. For example, between 2000 and
2010, most currency lost approximately 50% of its value, while silver
prices rose nearly 300%. Economies fluctuate between inflation,
recession and expansion, precious metals investment help diversify and
lower overall risk.
Asset Allocation
Whether you are conservative or aggressive in your investment
approach, precious metals can represent an important part of your asset
allocation. Some experts suggest that 10-15% of portfolio assets be in
precious metals. No matter what level of risk an investor wishes to
take, every portfolio needs a secure foundation.
Ease of Ownership
For investors who wish to take possession or direct control of their
assets, buying physical bullion has appeal. Owning bullion is easy and
convenient, and commissions on buying and selling it are minimal.
Inexpensive Silver
Silver bullion bars are the least expensive way to own silver. They
can be converted easily to cash, prices are widely quoted and they are
internationally negotiable. Silver bullion coins are relatively
inexpensive. Because of their smaller unit size they are affordable and
easily converted into cash. As in silver bullion bars, prices are widely
quoted and internationally negotiable.
Industrial Demand
Silver, more than other precious metals, has significant demand
rooted in sectors as diverse as imaging, electronics, jewelry, coinage,
superconductivity and water purification. For this reason, silver is no
longer known as just a precious metal, a store of value, a work of art
or an industrial metal. It is all of these. Today silver is
indispensable, working all around us to improve the quality of our
lives.
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