Should I buy silver as well as gold bullion?
Many investors spend time deciding whether to buy gold or buy silver, but the savviest investors own both. While gold can offer the ultimate insurance and protection against uncertain economic times, silver is a more speculative investment. Both metals are commonly invested assets, but silver is an entirely different investment which can realise substantial profits despite the initial VAT outlay. It’s because of these differences that owning both gold and silver together can be beneficial.
A speculative investment
Silver does not offer the same level of security that gold does due to its price volatility. However, the constant fluctuations result in more opportunities to buy and sell at profit, making it a more speculative investment.
History tells us that silver is a riskier investment than the safe haven of gold, which has consistently preserved
and increased the value of money.
Silver has proven to be a very good investment. In the three years between December 2008 and December 2011, the silver price increased 233%, substantially outperforming any other investment type such as stocks, property and even gold.
While the price is currently quite low compared to 2011's peak, it's common for markets, shares, and other investment options like bullion to alternate between bullish trading (keen demand) and bearish trading (limited demand). Usually prices hit a high or low point before they become too expensive to back or too cheap to ignore, and then the market flips.
A long-term investment
Unlike gold bullion, all silver bars and coins are taxed at a rate of 20%. Paying
Value Added Tax
often encourages investors to turn to gold. However, it is advised that buying silver is very much a long
term investment and should be owned for at least 12 months.
Ideally, silver investments should be kept many years, however it is believed based on recent history
keeping your silver for at least a year may be long enough to recover the 20% VAT initially paid,
and to return a profit. For example, if an individual had invested £10,000 (£12,000 including VAT) in
silver in December 2008, their silver bullion would have been worth over £33,000 three years later in
can offer an effective way of diversifying an
individual’s investment portfolio, therefore spreading risk and providing additional protection
against other investments.
Despite the current low price of silver (01/06/18) it is widely thought that silver will continue
to strengthen in price and demand due to the fact that silver is still widely used in industry
despite its status as a precious metal. More and more tech is using silver in a variety of
forms; in electric cars, solar panels, and in the newest computers.
Easy to exchange
With the world economy starting to look uncertain again despite a good start to 2018, many
individuals choose to buy silver as an alternative form of currency to protect themselves against
any possible situation where money loses much or all of its value.
It's more than a bit of a stretch to say that fiat currency (Pound coins and notes) will be scrapped
by the Bank of England and the economy will collapse, but the point is that British bullion coins
DO have a face value and ARE legal tender in the event some disastrous event does happen.
With this in mind, silver offers a different option to gold as small units of silver, such as 1oz coins,
provide the ideal currency to exchange or pay for everyday items due to their relatively small value
per unit. In comparison, gold coins and bars, which are around 75 times more valuable than silver,
would be better used to exchange for much larger items or assets.
If you have any questions about gold bullion investment, please feel free to contact our knowledgeable and friendly team on
0121 634 8060 who will be happy to talk your through any queries you may have. Alternatively, you can email us at [email protected]
and we will get back to you as soon as possible.