Silver Investing: Four Ways to Profit with the Ultimate Silver Portfolio
By Ryan Fitzwater, Investment U Research Team
A 2010 Investment U White Paper Report
If you've never considered silver in your investing strategy… you should.
Not only can silver provide an excellent hedge against market volatility, but it can be an exceptional investment. In fact, over the past 18 months, silver has leapt 107%.
And our analysis shows that silver's surge is just getting underway.
In fact, it could easily dwarf the boom of 1980, when silver jumped from $5 to $48 per ounce – an 860% gain in only 12 months.
The reasons are simple…
- After 17 years of critical shortages, supplies have reached all-time lows. With mining production of only 680.9 million ounces, and worldwide demand of 888.4 million ounces, global stockpiles are being tested like never before.
- What's more, the demand for silver is coming from multiple sources… While many investors might think of silver as "just another" precious metal, its application as an industrial metal is really what's driving demand through the roof.
- Flip on a light switch… grab a drink from the refrigerator… use your washing machine… glance in the mirror… turn on your microwave or watch cable TV… or use any number of high-tech gadgets – all possible thanks to silver.
So as more and more consumers require more and more silver dependent merchandise, supplies are being stretched to the brink. In fact, it's fair to say that the world is literally running out of silver.
But here's the good news: there's still time to make a play on silver before it really takes off. At about $18 an ounce, silver's still a bargain compared to its peak in 1980, when the first major boom in this metal made investors high triple-digit gains very quickly…
The Red Dragon Fuels "Silver's Boom"
As with so many opportunities today, the coming boom in silver can be traced back to China and India…
Once a leader in production, China's voracious appetite for all things silver has left it empty-handed. With its 1.3 billion consumers, the Asian giant announced its aboveground silver supply was completely gone… five years ago! Think of the growth the Chinese economy has seen even since then.
With a middle class of 300 million (larger than the entire population of the United States), the Chinese consumer is increasingly demanding the latest TVs, automobiles, plastics and electrical products – all requiring silver.
The demand for silver as an industrial metal is the critical factor behind the current surge in the spot price. As the world economy starts to pick up steam again, the demand for these goods will increase too, making silver the ultimate growth play in the precious metals sector.
But there's still another reason we believe silver deserves a place in your portfolio. Silver is, after all, a precious metal too.
And what that means is that silver – much like gold – provides investors with the perfect hedge against inflation, and in particular the declining value of the U.S. dollar…
The "Bargain" Hedge for Protecting Your Portfolio
Over the past 30 years, the dollar has declined against most major currencies….
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