Are Gold and Silver a Good Investment?

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written byThe Second Wallet
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Trying to find a wise and trusted area to invest in can be tricky. It’s often a gamble, even when it is meant to be a sure thing. While the stock market can fluctuate greatly, precious metals tend to be a bit more secure.

 

Even if the price of silver or gold or silver fluctuates, the demand is still there. Outside of real estate and crude oil, precious metals can give you a great return on your investment. A great return for a lot less invested.

 

Investing in Gold and Silver

 

Investing your money in gold and silver is nothing new. It is one of the first acknowledged currencies and commodities. Trading silver or gold for goods goes back hundreds of years.

 

Prices and the value of precious metals varied over the years as the government started to take control over its prices and value. Since then, the gold-silver ratio is measured by how much silver it takes to equal an ounce of gold. Even though the price of gold has been up and down, investing in gold or silver is still a smart investment. It does require storage, care, and insurance, which will take away from your return.

 

But, because gold and silver have always been valued as currency and investments, they are both a worthy contender for your investment dollars. It has always been used for currency, trade, and as jewelry and ornaments. Throughout history, as people began exploring and moving about to different countries, the only real commonality was precious metals, mostly gold and silver. It’s clear that very little has changed over hundreds and thousands of years. People are still impressed by gold and silver and it still retains its value in any form.

 

Gold and Silver vs Fiat Currency

 

Fiat money is the cash you have in your wallet. It is the tender we use every day that the government issues. The value of fiat money depends on how much there is of it, how stable the government is, and the relationship between supply and demand.

 

The fiat money does not hold value. It has value from day to day as a viable currency depending on the government. The government keeps the value of the fiat currency and it is agreed upon by the two parties that use it. Money and currency used to be made out of valuable materials, like gold and silver. Now, it is made out of materials that hold no value, so the money is only valuable based on its market worth.

 

Fiat money is universal and while it is not as valuable as gold, it can be exchanged at face value anywhere in the world. It is backed by the government and also controlled by them. It can handle fluctuation in a bad and strong economy. We can store it and use it for whatever we need. Banks can manage it much more easily than gold or silver.

 

But it is not as valuable as gold as there can be an endless supply of money but gold is limited. Gold or silver can not just be made because there is a higher demand for it.

 

How To Buy Gold and Silver

 

Once you decide that you want to invest in gold and silver, then you need to know where to buy it. You should find a reputable dealer to avoid scams. Don’t go to questionable online sites, follow television ads, or cold callers.

 

Find out where gold is on the market and what type of gold is more valuable. Then, buy what you can afford. Most people buy gold as an investment or insurance, as it is easy to sell.

 

Gold Bullion

 

Gold coins and bars are easy to buy and sell. They are readily available and can be sold in most other countries, as well as your own. Bars are most often sold in larger quantities, and coins can be individual or in special packages.

 

You can also have the gold bars or coins kept in your own possession or held somewhere secure. You can find these items from a coin dealer and some banks still offer them

 

Gold Mutual Funds

 

These mutual funds are available from your bank or financial institution. These work when several investors put money down on precious metals. It’s more convenient for people who don’t want to buy gold or silver in the physical sense. The value of the mutual funds depends on the value of gold or silver at any given time. They are a smart investment and can act as a buffer in times of economic downturns.

 

Gold or Silver Jewelry

 

While not the best way to invest in precious metals, you may already have a large quantity lying around. You can also buy it from an estate sale or from antique dealers.

 

It is not the best way to invest in gold or silver, but if you already have some from an inheritance, you can always add to it if you like. Retailers will mark jewelry up considerably and pawnshops may have deals, but you need to be wary.

 

Gold Futures

 

These are investments made on exchanges. They are a contract you can buy into and sell off at any time you like. As an investor, you agree to buy the gold at a set price. Many investors buy futures with the expectation that the price of gold will rise. It is often a safe expectation. They allow the investor more flexibility than trading actual gold or silver.

 

Investing in Gold and Silver

 

Yes, gold and silver can be a lucrative investment. There are several ways to invest in them and they never really go out of fashion. If you have other stock that fails, gold and silver retain and even grow in value.

 

While their price may fluctuate considerably, they will never completely lose their value. Their long-term investment value is worth looking into.