Since the credit crunch struck, then notoriously deteriorated into a full-scale economic recession, concerns about where to invest have been one of the few things in the ascendant!
At the risk of stating the obvious, anything which comes out of the ground has a scarcity value. Gold has always been the frontrunner in this respect. Silver, however, is used in sufficient quantities in industry to exert a pressure on its value. And if one ignores the uncharacteristic peak in 1980 when, due to an extraordinary set of circumstances, silver’s market price peaked at US $16.39 per ounce, the story of silver is one of steady, even if unspectacular, increase.
Another attractive feature of silver investments is the fact that the purchaser can own something tangible, in the form of coins or bars. There still exist Swiss banks where an investor can purchase or sell their silver literally across the counter. Appealing as this seems, if investment in actual silver were to become mainstream rather than a minority pursuit, the question of secure storage could turn into a headache.
More convenient and increasingly common is investment in ETFs or exchange-traded funds. The principle here is the same as an investment fund traded as stocks might be with the net value of the silver determining the value of the funds. The important point is that such activity is limited to authorized participants, thus maintaining a form of regulation.
There are other methods of investing indirectly in silver, one being by buying shares in mines, another by betting on the price of the metal.
Depending on the country in which the investor is domiciled, tax matters can affect the attractiveness of sinking one’s spare cash in silver. For example, unlike gold, in the UK, the purchase and sale of silver attract Value Added tax at the rate 17.5%. All in all, the would-be investor could do worse than to choose this ancient commodity as a home for spare capital.