Why Gold and Silver Investments are Preferred by Investors

Credit: Flickr / Mark Herpel / CC-BY 2.0

Silver and gold are always considered as a safe haven when the market is volatile. When there is a global economic turmoil, political crisis, investors turn to precious metals.

These investments can be considered as an inflation hedge or crisis insurance or solely a portfolio diversifier.

Following are a few reasons why owning precious metal is preferred.

  • It is an accepted fact by the economists the Fiat Currencies will eventually Go to Zero – and all currencies in the world today are Fiat. From the year 1500 around 617 fiat currencies became worthless and about 25% of those were due to hyperinflation. Another bitter fact is today all fiat currencies are only a paper, backed with no tangible resources.
  • Gold and Silver are tangible assets and have a guarantee from the central bank. These tangible products are in short supply. These days the investors are investing their money online, but it is preferred to invest in physical gold or silver as well.
  • Currency dilution results in a steep rise in gold and silver prices. This is a proven fact over the last 100 plus years.
  • Volatility in the stock markets across the globe. In a day the stock market may crash by even 15% or 20%, resulting in investors losing millions of virtual money. Remember Lehman brothers day, but such kind of price variation can never be seen in case of precious metals.
  • Precious metals are globally accepted. Isn’t it a good thought to invest in something which is globally accepted and valuable? Even if the economy of a particular country collapses miserably the precious metals will still have value worldwide.
  • Gold and Silver can be very easily liquefied, as long as you have made the investment in a proper way. Even if you have inherited from your grandparents, it can be very easily converted to liquid cash in no time in case of a crisis, which is not the case in another form of investments.

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