Silver – An Excellent Form of Investment

Many of us have a love for art, a love for wealth, and a love for collecting things. Some examples of things people collect: kids collecting baseball cards. Jay Leno collecting cars. Shaq collecting anything related to Superman. Penelope Cruz collects coat hangers? Pimply faced high school boys collect cologne bottles. Well, lipstick on a pig…can sometimes bag a hottie, so who I am to judge? And of course, just about every gal on earth collects shoes (while Steve Madden apparently keeps collecting his paychecks, putting his net worth somewhere around $120 million).

Can you believe some French guy paints the bottoms of shoes red, and now he’s worth around $85 million? Mind blown.

When we collect something, it’s considered a hobby. Pretty sure all those high heeled pumps aren’t an investment! It brings us an intangible joy in the moment of collecting, or adding another to the hoard. Or taking an occasional peek at that vast collection, with a nice self-congratulatory pat on the back. But if there ever came a time to sell off any such collection, it’s unlikely that how much the collection is being sold for will fetch anything near what was spent building it up. For example, a kid’s baseball card collection probably took years and a lot of money spent amassing it, but would be very difficult to sell due to lack of a liquid market of buyers for all those cards. Certainly there is the potential for a “lottery” situation where one baseball card could be worth a tremendous amount of money, but that is usually not going to be the case.

On the other hand, my belief is that precious metals – and physical silver in particular – can be considered a collector’s hobby and an investment at the same time, with the unique ability to provide entertainment value, maintain its monetary value over the long term relative to inflation, and still have a very liquid market available to sell to. Meanwhile the paper dollars we hold gradually lose purchasing power every year. Now whether I can convince my shoe loving sweetheart of all this is a different story. Yes, I see that incredulous look in her eyes while I gleefully tear open a new shipment of silver.

Granted, silver should never be the only form of investment, nor should anyone put anywhere near all of their money into it. The metals market can be highly volatile and fluctuate wildly. And for those without any kind of emergency savings account, should they even think about buying precious metals? If there are mouths to feed and you need to put food on the table, that’s your primary concern.

But if there is still some disposable income left over to be stashed away for the longer term, and you seek an alternative type of investment to diversify into, consider that silver has been around for thousands of years, and is still thought of as a form of money and a store of value. The United States used to issue silver certificates that could be redeemed in physical silver, thus limiting the government’s ability to just push a button and print more money. Unfortunately, the powers that be are now in full throttle button pushing mode, grand magicians pulling dollars out of thin air. Meanwhile, there’s now a War on Cash, as well as the global negative interest rate environment. Both are topics for another day.