Unpredictable price moves: Because silver has worth in multiple categories, its price can waver wildly, caught in a tug-of-war between its industrial and investment valuations.Your only chance to benefit is if you sell it during a price rise. Limited income/appreciation potential: A a tangible commodity, silver doesn't offer any interest like a bond, or dividends like a stock.Or for something to happen to the industry itself - witness the decline of photographic film, a big user of the metal Vulnerable to technology shifts: There's always potential for silver to be replaced by another metal in its manufacturing uses.Sensitive to recession: Driven as it is by industrial growth, the price of silver can be decimated by an economic slowdown.The metal brings its fair share of risks, as well. Of course, silver - like any investment - isn't all reward. It's also at the forefront of some innovative fields. Silver is used in the manufacture of a variety of things, from glitzy jewelry to humble batteries, from medical equipment to microcircuits. However, silver is an industrial metal as well as an investment metal - which significantly affects its price performance and outlook. In these ways, silver functions like gold as an investment, serving a similar "safe haven" role. Silver holds its value long term and fares well when interest rates are low - and fixed-income investments aren't earning much. As a physical asset, it has intrinsic worth, unlike the dollar or other currencies. The metal also acts as an inflation hedge. Since it's impacted by different influences, silver can be a good way to diversify and counterbalance your portfolio vis-a-vis equities or other paper securities. Tangible assets' prices generally move in the opposite direction from stocks and bonds.įor this reason, many investors turn toward commodities like silver when the stock market has a poor outlook or in times of economic recession or political turmoil. Silver is classified as a commodity - a publicly traded, tangible asset.
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