How Much Silver Should You Acquire?

by: Ben Tseytlin - on Gold & Bullion

Once people understand the true value of silver, and the importance of owning it, one of the first questions that come up is how much they should acquire?  While there is a saying in the financial industry that you should put “ten percent of your cash in precious metals and hope it doesn’t work,” below is a more in depth answer to this question.

The Short Answer Is That It Depends

Many people invest in this metal because it presents a spectacular opportunity to make incredible future profits. There are few commodities on the market today which are as undervalued as silver, and given the current global financial climate, with nations and corporations running up debt levels never seen before in human history, many experts believe we are on the precipice of a massive global crash. Such an event could send its prices to levels never before seen, and this does not factor in the metal’s necessity in emerging technologies such as robotics, quantum computing, AI and nanotechnology.

Therefore, if you want silver for investment purposes, you should acquire as much as you can. Some recommend between 500 to 1000 ounces minimum. However, there are those that primarily want the metal as a hedge against inflation, and for such individuals, putting between ten and fifteen percent of their money in silver is the wisest choice. However, before acquiring it, there are number of key things to bear in mind.

The Short Term Downsides To Owning Silver

While the long term advantages to owning silver are numerous, it won’t seem that way in the short term. Silver is notorious for its volatile prices, and for the last few years it hasn’t moved much on the charts. While this presents excellent buying opportunities for those looking to acquire the metal affordably, it is lousy for investors, at least those looking for short term profits. There is also the issue of storage, and the fact that unlike stocks, silver doesn’t pay dividends, and unlike rental real estate it won’t put cash in your pocket monthly.

This means several things. First, anyone who wants to invest in silver must be in it for the long haul. This means they should expect short term losses, rather than gains, and should be in a financial position where they won’t have to liquidate their silver holdings anytime soon, because if they do most likely they will lose money. Second, you want to make sure that you don’t put so much of your money into silver that you don’t have enough cash to deal with the common financial emergencies that life throws your way.

The good news about silver is that unlike gold, platinum or palladium, you can get started without spending a whole lot of money. The metal’s current affordability lends itself well to dollar cost averaging, where you buy a small amount here and there, gradually accumulating a stockpile without spending huge amounts of cash up front.