is it better to invest in silver and gold by mikesiera

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how to investing in silver and gold in many aspect

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									What is the better investment in today's economy, gold or silver?

Most people would probably answer gold, but the precious metal with the
greatest upside may be silver. Silver is more volatile than gold is, and
with expected inflation and increase in demand, Silver has a potential to
increase in value more than Gold.

Now the purpose of this article isn't to talk you out of investing in
gold as it is a solid investment. Rather, the goal is to educate you on
the history of silver, what influences it's price, and what it's future
looks like so you can decide if investing in silver is better for your
portfolio.

Before I attempt to predict the future, let me first discuss the past
performance of silver compared to that of gold.

In 1970, the price of gold averaged $35.94/oz. By the end of the decade,
its average was $306/oz, or an increase of about 1000%! Not a bad return.
In 1970, the price of silver was only $1.63 per ounce. By the end of the
decade, it had risen to almost $22 per ounce! This was an increase of
around 1400%.

Would you rather invest a smaller amount and receive a higher return?
These past results make the future of silver attractive.

Right now, silver prices are hovering in the range of $17 per ounce. Just
imagine, silver prices skyrocketing to around $225 per ounce in the next
year.

Why use examples from the 1970's in regards to gold and silver? Many
people, including former Fed Chairman Paul Voelker, admit that the
current economy is acting like it did in the 1970s, with higher food and
energy prices, instability in the stock market, higher unemployment, and
a lower performing dollar. Also Voelker, according to Forbes Magazine,
recently told the Joint Economic Committee that while the economy
obviously does not have the full-blown, double-digit inflation crisis
that finally appeared in the 70s, 'there is an underlying tendency to
inflation.' Given the similarities between now and the 1970's, the price
of silver may be ready for a sharp increase again.

The second reason why silver may be a better investment than gold in this
economy is that silver has many more industrial applications than in the
past. And, like gold, silver is in a limited supply. So as demand
increases and supply does not, the price of silver will go up!

What are some of the products that use silver? Batteries, flexible and
solid plastics, and electronics are traditional uses for silver that keep
demand alive for it. But the following are some newer uses for silver
that will keep increasing demand:

• Mirrors & Coatings - Silver can be polished to 95% reflectivity. While
mirrors have been around for centuries, silver is being incorporated in
different coatings to reduce sun exposure to the eyes with an eyeglass
application. This usage is also being applied to glass buildings in order
to help keep buildings cool in summertime and thus reduce energy
dependence.

• Medical - It has only recently been discovered as to how silver's anti-
bacterial abilities work. One area of development includes using Nano-
silver particles as a delivery mechanism for silver ions, which are being
incorporated into many new antibacterial products. For example, silver
ions are being incorporated into paints and coatings to inhibit surface
germs and fungus.

• Water Purification -Silver ions are now being used in all sorts of
water purification processes. Example customers are hospitals, community
water systems, pools, and spas.

• Solar Energy - Silver paste not only increases the efficiency of solar
energy collection as electricity, it can also be used in solar farms that
use the collection of the sun's rays as heat to produce steam powered
generators.

Finally, collecting silver coins is collecting massive popularity as
well. The U.S. Mint sold more Silver Eagle Coins in March and in the
first quarter of 2010 than ever before. A total of 9,023,500 American
Silver Eagles were purchased in the first quarter of 2010, the highest
amount since the coin made its debut in 1986! Many investors are starting
to awaken to the benefits of investing in silver.

According to the London Bullion Market Association's Forecast 2008
report, the silver market looks bullish over the next couple of years.
Silver's price gains can be attributed to solid demand-side investment,
and that appetite looks set to continue in the future as the race between
the old world and the emerging economies to corner the world's natural
resources intensifies... be it a mine or simply physical metal. Given the
economic factors, the historical surge due to these factors, the increase
in industrial demand, and the increased popularity in coin collection,
silver may be a safe investment for investors to bully their portfolio
than other types of assets and investments.

Tom Bukacek is a successful real estate investor and gold & silver coin
collector located in Austin, TX. For more investment articles written by
Tom, please visit http://www.tomsgoldenrules.com.

								
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