Is Silver a Good Investment?


Hello Friends!  In this article we’re going to take on this very loaded question:  Is buying silver a good investment?  Honestly, when thinking about silver investing or intending to make any type of investment – be it money, time, energy – you either consciously or unconsciously ask yourself the question of whether it’s a good investment or not.  We make our risk/reward calculations based upon our often subconscious criteria and we either do it… or we don’t.  As you’re probably aware, during the mid-summer of 2013, silver is wallowing in the depths of yet another heartbreaking correction, having plummeted to its current $19 level from almost $50. That’s about 60% for you math fans.  If you intend on asking someone today who was buying a bunch of silver in the high $40 range back a couple of years ago “is silver bullion a good investment right now?”, I’d ready yourself for a jab to the throat.  That violent response is their way of informing you that, “No. I don’t believe that it would be a wise decision to invest in silver at this point in time.”  After you can breathe again, you get up, dust yourself off and politely inform your violent friend that he is wrong.

Why is Silver a Good Investment?

Silver value hasn’t been this good in years, so now is the time to be buying silver.  “What’s that?” you exclaim incredulously.  How could I possibly propose such preposterousness?  For this very reason: price has plummeted 60%!  Your intention when investing money is to buy low and sell high.  (see the quote from Jim Sinclair in the Silver Price Forecast.)  Now to believe that silver is a good investment right now, you have to believe that it is still in a bull market, in other words, that there are ultimately more buyers than silver investingsellers and that, consequently, price is still rising over time, and that what we’re experiencing right now is merely a correction in an upward direction of price.  A quick check of the long term chart (10 years +) says that’s true.  But you know what, in my opinion, these days charts are almost worthless.  We can check our trendlines and our support and resistance levels all we want, but when you come right down to it, silver (and gold) is a manipulated market.  I don’t want to get into it right now, but I discuss this in the Silver Shortage/Is Silver Being Manipulated? article.  This latest correction has been misread by just about every analyst and blogger and precious metals writer I can think of.  I haven’t heard so many calls for a bottom since the last time I was in a strip club (that was about 30 years ago, incidentally).  Even guys like Jim Sinclair and Turd Ferguson (you read that right) have been repeatedly wrong.  Even yours truly, the master (note the lower case “m”) bought 100 lovely Silver Maples at the then-low price of $28.  I was pretty sure that was the bottom.  I was wrong, obviously.  And except for the liars and a handful of bizarrely accurate chart techs, everyone’s been wrong.

So, why is silver a good investment right now?  (Forgive me if you’ve read this already)

  1. The world economies are highly unstable
  2. The world’s banking systems are highly unstable
  3. Silver is seen as a haven of monetary safety throughout the world
  4. Physical silver demand continues to increase despite paper pricing shenanigans
  5. Silver holds its value over time – I’m not talking years here; I’m talking decades
  6. The gold/silver ratio is high high high – it’s traditional level is ~13:1
  7. There’s a Silver Shortage? The inventories of above-ground silver continue to shrink
  8. China and other countries are massively increasing their silver imports
  9. Silver has fallen 60% – buy low

“Yeah, so what!” some of you scream.  It’s so volatile, it earns no interest, it’s an industrial metal, there’s no damn shortage.  Yeah, I hear you.  My gut hears you too and tells me that this is the smart move here.  Even if you’re not wholly convinced, I encourage you to buy a little bit of silver (and/or gold, if you prefer).  You don’t have to go “all in” like some crazy people (throat clearing here).  But I encourage you to continue doing your research and especially listening to your gut when considering silver investing.

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