Silver
Portfolio diversification
Silver is an affordable choice for those looking to get started in precious metals investing. The extraordinarily bullish fundamentals of the Silver Market suggest, at current prices, that investing in silver could offer investors one of the single best long-term investments today. It is no secret that both gold and silver are recognized as a store of value. What is not so well known is that while gold has demonstrated a solid trend of price appreciation since 2001, more than quintupling in price, the price of silver has recently outperformed that of gold.
Performance
In a precious metals bull market, silver consistently over the long-term outperforms gold. Silver has had an incredible run, up 84% in 2010 and up another 33% Y.T.D. so far of September 2011.
Since October 2001, silver has increased in price from approximately $4 to an April 2011 high of $50, which is an approximate 1200% gain. During that same approximate time period, gold went from $265 to a recent high in April 2011 of $1500 for an approximate gain of 700%. Silver outperformed gold by 500% in the same time period. In 1980, silver briefly traded at $50; in today's equivalent inflation-adjusted prices, that would be at least $130.
Demand and supply
Worldwide market demand for silver is growing, while supplies of silver are quickly disappearing. The majority of silver mined is used for consumption in industrial uses; therefore, unlike gold, most silver is consumed very quickly instead of hoarded. Silver is therefore a precious metal with a store of value quality like gold, but it is also primarily an industrial metal, which gives it an inherent useful value in growth industries like cell phones, computers and chemicals. New high-tech uses for silver will further strain already tight supplies in the future. World demand for silver now exceeds annual production and has every year since 1990, depleting above-ground stockpiles of silver. The U.S. government, once the largest stockpile of silver on the planet, dumped billions and billions of ounces of silver onto the world market over the years, resulting in depressed silver prices. Today, that government silver hoard is gone, and now the U.S. government is a buyer of silver at prevailing world silver prices.
Future investment outlook
Some of the world's leading financial analysts believe that silver is one of the world's most important commodities, with unparalleled investment opportunity for the future. In addition, silver prices at times have been extremely volatile, making silver an attractive investment and trading vehicle. For these reasons and many more, the silver market certainly appears to represent an outstanding investing opportunity.