The Issue of Investing in Silver

Silver BullionEverybody knows that gold is a good investment, and silver is not far behind. Some people buy silver bullion because they consider it a safe haven in hard times.

However, you should know a few facts about silver before you invest in it.

It is Not as Stable as Gold

Some investors like gold better than silver because the price of silver tends to fluctuate more. Silver has many uses in industry, so the price can rise and fall depending on what is happening in certain industries. However, silver does usually better than gold in a bear market, which is when prices are going down. Brexit has started a bear market in the UK, so this is a good time to buy silver bullion.

It is Cheaper

Silver is, of course, cheaper than gold, but the price is not where it ends. When investing in precious metals, you need to see what the ratio is for buying them. You can then determine if one is relatively cheaper than the other is. The higher the ratio, the more expensive it is coming out. The current ratio of gold to silver is 79, which means gold is 79 times more expensive than silver is. However, there are times when the ratio falls below 20. If you buy when the ratio is high and sell then the ratio is low, you have a greater chance of making a profit from silver without tying up too much cash.

It is Subject to VAT

One advantage of gold as an investment metal is it is not subject to VAT in the UK. It is not the same for silver. You have to pay 20% VAT when you buy silver, even if it is legal tender such as the silver Britannia coins. You can avoid paying VAT by buying silver online and leaving it in a bonded vault. You do have to pay storage fees, however, so you need to weigh the costs of paying VAT outright and taking physical possession of your silver, or keeping it in storage.

Silver bullion can be a good investment if you know what you are doing. The facts above should help you make a smart decision on whether to buy silver or not.