7 Reasons To Buy Silver In 2021

Dear Rich Lifer,

In 1998, Warren Buffett bought 129.7 million ounces of silver for Berkshire Hathaway.

Buffett’s silver purchase was so large it became legendary among silver investors. To this day, we still don’t know why Buffett bought so much of this precious metal?

Some speculate it was to hedge against inflation. But since dumping it, it’s safe to say it wasn’t because Buffett needed it for survival reasons.

When readers ask why buy silver, our answer sometimes surprises.

Generally speaking, investors buy precious metals for one of three reasons: as an investment, as a hedge against inflation, or in case of economic collapse.

As you’ll see today, there are several more reasons to own physical silver in your portfolio and now is as good a time as ever to start buying.

Here are seven reasons why you should consider buying silver:

Reason 1: Silver is Cheap

Silver is often called the “poor man’s gold,” and at roughly 1/70th the price of gold, it’s hard to argue against that.

As of writing this, the price of silver is $25 per ounce, which means anyone should be able to own some silver. If you want a hedge against inflation and you can’t afford a full ounce of gold, silver can be a great way for you to gain all the same benefits of owning gold at a bargain price.

Reason 2: Silver Outperforms Gold in Bull Markets

One of the knocks on silver is that it’s such a small market. Because of how tiny the silver market is compared to gold, it doesn’t require a lot of money moving into or out of it to impact the price significantly.

This is good and bad news for investors. The greater the volatility means that in bear markets silver falls more than gold. But in bull markets, silver will climb higher and faster than gold.

Two modern examples where silver outperformed gold in bull markets are from 1970-1980, gold climbed 2,328%, whereas silver soared by 3,105%. And from 2008 to 2011, gold gained 166% and silver rose a whopping 448%.

It’s safe to say that in the next bull market, silver will likely outperform gold yet again, since the market size has not changed dramatically.

Reason 3: Silver is ‘Real’ Money

Unlike digital or paper money, physical silver and gold, are forms of ‘real’ money because they can’t be created out of thin air, and thus depreciated.

Some distinct advantages to precious metals like gold and silver are that they have never been defaulted on, have no counterparty risk, and have long histories of being used as money in society.

What’s more, you gain these advantages whether you own gold or silver. And like we established in reason number one, silver is the more affordable metal right now.

Reason 4) Silver Can’t be Hacked

We live in a world of paper profits and currency creation where silver and gold seem like the antithesis of wealth.

But how many assets do you own that can be held in the palm of your hand?

The physical nature of precious metals is their inherent advantage. It’s also your best hedge against cybercrime.

Of course you still need to exercise caution and take measures to safeguard your silver from burglars, but you eliminate all the risk associated with being digitally hacked by simply holding a tangible asset.

You can also choose to be as private with your gold or silver as you like, another underappreciated advantage.

Reason 5) Industrial Use of Silver is Growing

Silver is one of the most electrically conductive, thermally conductive and reflective metals on the planet. For these reasons, more than half of all silver demand is taken up by industrial use.

Most of the products you use on a daily basis contain silver. For example: your cell phone contains about one-third of a gram of silver. Your self-heating windshield on your car has an invisible layer of silver. The photovoltaic cells on solar panels contain silver…the list goes on.

Because of silver’s unique properties, industrial demand will continue to remain high. But here’s the thing… recycling silver is expensive, so millions of discarded products that contain silver are reducing the overall silver supply. If silver supply peaks and industrial use continues the way it’s going, we could see demand outstrip supply.

Reason 6) World Demand of Silver is Growing

Demand for silver in China and India has exploded. From 2012 to 2016, silver jewellery demand in India has grown nearly 500%. The same cannot be said for gold.

In China, from 2000 to 2016, silver in all uses has grown from roughly 50 million ounces to 220 million ounces.

Sooner or later, this kind of growth in demand will be met by a shortage in supply and we’ll see the price of silver soar, which is great news for anyone invested in silver.

Reason 7) Silver Is Undervalued

There’s an argument to be made that silver is undervalued right now compared to gold. If we look at the average gold-to-silver ratio, how many ounces of silver are needed to buy one ounce of gold, we’re sitting at about 70:1.

During the 20th century, the average was 47:1. And in the 21st century, the average has been closer to 60:1.

If you also take into account how we mine silver today, you can see how this argument holds water. For one ounce of gold, we mine roughly nine ounces of silver. This would suggest that we should be trading at nine to one. But since we’re trading at 70-to-1, how long will this ratio last?

We won’t say that silver is the buying opportunity of the decade, but there are several good reasons to own some silver in your portfolio.

Whether you’re hedging against inflation, preparing for total economic collapse, or looking to speculate, silver could be a solid investment.

To a richer life,
The Rich Life Roadmap Team

You May Also Be Interested In: