The performance of silver in the markets is always followed along with the performance of gold. Gold has been on a lot of people’s lips but silver has also managed to garner some attention. Both as an industrial metal and as an investment metal. The demand for silver in 2019 was less than what it has been in the last decade. In the last 10 years, the demand for silver average 23%, in 2019 that value fell to 20%. Even with jewellery being added to the demand from industry and investment, the silver demand was still low. However, silver has become a preferred investment asset for people who have superannuation funds. It is cheaper to buy silver bullion SMSF than it is to buy gold. Silver is also less rare and often easier to source than gold. However, going by the information reported by bullion dealers, 2020 was just as trying for the silver market as it was for gold. Bullion dealers reported shortages in both gold bullion and silver bullion. This means that people were buying more silver as much as they were buying gold bullion. You can invest silver bullion in your SMSF to balance your portfolio.
Silver Vs. Gold
The price of silver can be volatile. This has to do with its role as an industrial metal. The price of silver goes up and down more often and much more dramatically than gold. However, there are times when silver offers a significant return. This works for investors who have a long-term outlook. In order to see how silver will rise in response to gold, you need to follow the gold-to-silver ratio. This is a measure of how much silver you would need to have in order to buy an ounce of gold. This ratio was 20:1 in 1980 and only moved 30:1 in 2011. In 2020, the ratio jumped to 110, this was the cheapest that silver had ever gold. However, in the last 9 months of 2020, the performance of silver improved and managed to even outperform gold. When the ratio falls, it coincides with a rise in the price of gold. However, when the rate of the price increase outpaces that of gold it means the metal is in a bull market. Between May 2003 and April of 2011, the ratio declined by 60% and resulted in a whopping 900% increase in the silver price. Given this kind of history, it makes sense that long-term investors and people planning for their retirement somewhere in the future buy silver bullion SMSF.
What should you look for when you are investing in silver
There are two important considerations that you would need to make when you are looking at superannuation funds: You need to trust the dealer you are using to invest your SMSF you are using and whether they have secure storage.
The following questions are crucial:
- – When was the company founded?
- – Who owns the company
- – Do they make their own silver bullion coins and bars
- – Does the company offer guarantees about safeguarding your holdings
- – Is the company a member of The London Bullion Market Association
Transparency is also very critical. Does the company have a site that shows the current price of precious metals? Does it offer more information about investing in precious metals? A company that is clear about the fees it charges and any other charges you might have to pay to hold your silver bullion SMSF.