What are the reasons to buy silver?

An increasing number of private savers and investors are choosing to convert part of their savings into physical precious metals. Gold is a popular choice, but what are the reasons to consider buying silver?

Silver vs. Gold

Gold typically has more appeal than silver, but both gold and silver have played a role as real money for over 5,000 years. They are a proven method to protect and preserve wealth and purchasing power. Silver tends to have a slightly more volatile price, which can be seen as both a risk and an opportunity.

The most important reasons to choose or not choose silver are practical. Much of the silver is taxed at 21% VAT, whereas gold is exempt. Additionally, the role of silver as a primarily industrial raw material gives it a different economic position than gold, which is more often viewed as an investment or luxury product.

Is Silver an Industrial Raw Material?

Silver is certainly an industrial raw material, more so than gold. It is used in consumer electronics like smartphones and computer chips, sustainable energy applications such as solar panels and wind turbines, and medical products.

The downside of this is the 21% VAT applied to most silver. The upside is that energy transition and economic growth contribute to increased demand for silver, and thus potentially a rising price.

Historical Return on Silver

This economic value is clearly reflected in silver’s historical returns. Over the past 20 years, silver has yielded an average return of 9% per year, significantly higher than the average interest on savings accounts.

Despite its stronger economic dependency, silver can still be considered a good hedge against inflation and an investment with stable value.

Risk Diversification

In addition to good returns, silver also contributes to risk diversification in your portfolio. Silver, being more of an industrial material than gold, behaves differently in the market. This can reduce the risk of devaluation during economic downturns or recessions.

Furthermore, silver is almost as easily tradable as gold and is widely available, making it well-suited as an investment instrument.

What Are the Drawbacks of Investment Silver?

The most significant downside is that silver bars and, from 2025 onward, silver coins are subject to 21% VAT. As a result, the difference between the purchase price and the silver market price is larger than with gold.

Additionally, because silver has a lower price and greater volume per gram, it can be more challenging to store or transport securely.

Conclusion

Investment silver has both advantages and disadvantages. It is important to weigh these carefully for yourself. The Silver Mountain offers a wide selection of silver coins and bars in stock.

Disclaimer: The Silver Mountain does not provide investment advice and this article should not be considered as such. Past performance is no guarantee of future results.