Gold & Silver: Worth the Investment?
If you're continuing on from our previous article - read on to learn about whether or not gold and silver make good investments.
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Gold & Silver as Contemporary Commodity
Another major sector of gold and silver use is commodity and future exchange. Gold and silver coins, bullion and ETF’s (exchange traded funds) are purchased and traded as investments.
We are by no means bankers or financial advisors and thus we don’t feel qualified to issue our readers investment advice. However, we will mention some gold and silver investment information we came across in our research on the subject:
1. Gold and silver and highly volatile investments.
It seems that often times people make the mistake of investing in gold and silver as value holders. Fluctuations in gold and silver prices over the past 50 years, however, indicate this not to be true.
In 2001, gold was at $388 per ounce.
In 2011, gold was at $1961 per ounce.
In 2017, gold is back down to $1255 per ounce.
In 2001, silver was at $6.66 per ounce.
In 2011, silver was at $52.74 per ounce.
In 2017, silver is back down to $18.23 per ounce.
2. Gold and silver are speculative trades.
This being the case, if you’re looking for a “safe” investment, gold and silver may not be the option best suited for you.
3. Gold and silver prices are dictated less by pragmatism.
As mentioned early, gold and silver are limited and used in a great number of industrial applications. Following this logic, one might think that buying gold/silver now and hanging onto it for 30 years is guaranteed to produce a high return on investment.
More electronic devices being produced, more gold/silver being used…eventually manufacturers will need to buy gold/silver at a higher cost, right?
This is a line of logic that’s also employed quite a bit, yet the biggest fluctuations in gold and silver have more to do with politics than market productivity.
4. Gold and silver prices are dictated more by emotion.
This point applies to our “doomsday-preppers”.
Gold and silver investments are chiefly made out of a lack of faith in the world’s fiat currencies. They’re often made as a hedge against a failing dollar or euro.
Personally, we feel that if the global economy ever collapses to the point where people aren’t accepting $’s and €’s…bullets, canned goods and medicine are probably a better investment!
5. There are more costs to gold and silver investments than the commodities themselves.
Gold and silver investments may be difficult to liquidate, often times require verification, could require re-assaying and still require the payment of capital gains tax!
Furthermore, if you invest in gold and silver bullion or coinage, storage, safety and security concerns should be top priority. It could be a bit like keeping all of your money under your mattress at home.