Go Green, Invest In Silver?

Recently, analysts have been arguing whether Silver deserves a place in your portfolio. Admittedly, after the turbulent period precious metals went through last year, it’s difficult to predict what will happen in future. However, the fundamental indicators available to us suggest that silver is currently undervalued, and that a significant rise is on the books over the long term.
 
Granted, at current level, silver is quite volatile. After appearing as if it had finally overcome its troubles from last year, it recently shed all its gains. One might rightly say that the huge demand that the American Silver Eagle saw earlier in the year has been a major driver. Consequently, as soon as the demand tapers, the price of silver falls.

That’s a valid argument.

However, I’m taking a long-term view here and as such, the idea is to do a buffet-esque move and enter into the market now when there is a lot of fear. Here are two cases for a long-term investment in silver.
 
First, the uses of silver are expanding, which is bound to ensure that demand for silver will always be high. And, when there is high demand, odds are that a price surge will follow. One of the uses of silver this is currently developing is in the solar industry.
 
unemployment rate in the US was 6.7%, compared with the 5.8% at the beginning of 2008 – before the financial crisis. If the economy were growing, the unemployment rate in the US should be somewhere near pre-crisis levels.  However, more people are unemployed now than before the financial crisis.
 
Here is a simple explanation. If the economy were improving, there would be more work to do, which would require an extra workforce, and in the end, reduce unemployment rate. Therefore, that we’re experiencing an opposite of this means economic growth is slow.
 
Whenever the economic growth is slow, the risk of volatility of paper-based assets becomes higher, as we’re closer to crisis than we are to haven. Consequently, the need to invest in ‘safe haven’ assets becomes higher. Obviously, when we talk about safe haven assets, gold is the first to come to our minds. However, silver is also a safe haven asset.
 
The main reason I’m tipping the scale in silver’s favor in this case is that it is cheaper relative to gold. And with the impending growth of the solar industry that I discussed above, the upside potential for silver is big.
 
By investing in silver, you’ll be tapping into the long-term growth opportunity presented by the solar industry, and at the same time, you’ll be protecting your wealth in this uncertain economy.

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Written By: Craig Adeyanju