For as far as we can think back, precious metals such as gold and silver have always been considered a haven for investments. However, they can be quite volatile. But, when we compare them to other assets, they are better forms of investments.
It is, therefore, no wonder that they are most investors’ preferred choice. Now, you can even own a gold IRA account where you can hold gold and other valuable metals like platinum and silver.
However, most investors tend to ignore silver and opt for gold which is more popular when they choose to have a precious metal IRA. But, according to the latest trends in the silver market, most analysts have predicted that now is a very good time to own silver.
Hence, in this article, we will be discussing some of the important reasons an investor should have silver coins IRA but first, let us explain what an IRA is.
IRA – What exactly is it?
IRA is an acronym for the term “individual retirement account”. It is an account through which workers save towards their retirements. They often have some tax advantages that serve as long-standing investments for investors.
We have various types of this kind of account, and each has its peculiar tax benefits. These benefits are offered to people who use these accounts. For instance, withdrawing into an IRA may not come with any tax charges. These accounts can be opened by anyone working and earning income.
The account can be opened by brokers, banks, investment companies, and Robo-advisors (programmed advisors).
Precious Metal IRA
As we said above, there are various types of IRAs, one of which is gold or precious metal IRA. These are usually self-directed. Self-directed accounts often let investors invest in several types of assets, from real estate to art to several other non-traditional assets that investors typically cannot hold in regular accounts.
Precious metal IRA is the vehicle most investors use to diversify their portfolios. It is also a desired investment choice because these metals have over time proven to not just retain but increase value over time. This makes them the perfect long-term saving plan.
With that being said, let us now consider the reasons why having a silver IRA is a good investment plan.
Why Silver is a Good Investment
1. Portfolio Diversification
If you speak to any financial adviser, they will tell you that literally putting one’s eggs in just one basket is not a great choice. Financial experts have always emphasized the need to diversify portfolios. Relying on just 1 asset type may end up being an investor’s undoing.
Silver is considered a great way to diversify one’s portfolio because as we have said, it has always been considered a haven. So, even if the economy is not stable, you can be rest assured that a fraction of your savings is safe.
While having a precious metal IRA is great, you also should not place all your savings there, because as we said, having just one asset type is bad. So, while you have a fraction of your savings in any stable asset such as silver, you can invest the remaining portion in other commodities that have higher returns. So, if there is ever any hit, your portfolio can easily absorb them.
2. Hedge over Inflation
Perhaps, this is one of the most important reasons to own one of these accounts. Paper currencies would depreciate over time. However, this cannot be said for other stable assets like precious metals. These metals have always served as a hedge over inflation since they can retain their value through inflation and recessions.
Historically, the value of this metal has drastically increased (almost ten times) over time, whereas the US dollars during the same time has lost almost 90% in value.
An investor having silver in their proverbial basket will shield them from inflation and stabilize their purchasing power. Besides, even if the economic environment is at its direst point, the value of this metal will never get to zero. The metal will always hold value.
3. Silver’s High Demand
This metal is not just a vehicle for investments; it is also used in several industries. For instance, it is a vital material to produce solar panels and electric vehicles. It is also used for water treatments. You can read this to learn more about the various uses of silver in various industries.
Since this metal is used in several industries, it will always be highly demanded. Due to this, its value will only keep increasing. As we even advance technologically, there will be more need for this asset as more and more industries may discover it to be beneficial to them.
At some point, the supply may not match up with the demand. Meaning, demand may surpass supply. If this ever happens, the values of this asset will more or less skyrocket.
4. Keeps You Rest Assured During Uncertainties
If there is anything the world has learned with all that happened is that no one can predict what can happen. While we may be approaching the tunnel’s end and we can now see the light, we still know we are in uncertain times until we at least move way past the tunnel.
Since times are so uncertain, knowing that you can assess your investments at any time you wish to can give you some semblance of control. This is what a precious metal IRA offers since it is a self-directed account. However, you do not have this luxury with a traditional account since it is restricted to treasury notes, mutual funds, and bonds and stocks. These are all traded publicly.
Self-directed accounts allow you more flexibility as regards your gains and how many risks you want to take.
In this article, we have discussed some reasons silver IRA is a great investment choice. Some of these reasons include the demand of the asset, its role as a hedge over inflation, and how it helps to diversify portfolios.