*this is a collaborative post*
Lots of people who are new to investing in precious metals tend to waste a lot of time wondering whether to invest in gold or silver, when in reality they should be working out how they can invest in gold and silver. A quick visit to Golden Eagle Coins should set people’s minds at ease because it has a huge range of precious metal products that will suit most budgets.
It has to be said that silver isn’t anywhere near as valuable as gold and it’s also prone to more fluctuations than gold; however, this difference in behaviour can work out really well for you if you work with it in the right way. Plus, adding another type of metal to your portfolio is a good diversification method.
Silver’s volatility means more chance of profits
Silver isn’t as stable and predictable as gold but this actually presents investors with more opportunities to buy low and sell high – which most often means a tidy profit! Silver is more speculative than gold, which is riskier, but all it takes is a good sense of timing to make it a success. Silver has sudden upticks when the selling’s good, as well as sudden downward movements, which are great for buyers.
Using silver for long-term investments
Precious metals are deemed as collectibles by the Internal Revenue Service (IRS) when it comes to tax. If you make any gains on your collectibles before you’ve owned them for 12 months, then these gains are taxed as if they’re ordinary income – they’re taxed as short-term capital gains. If you’ve had the collectibles for more than 12 months and sell them at profit then they’re seen as long-term gains and taxed at no more than 28%.
If you’re in a federal tax bracket of 28% or higher then your net long-term gains will be taxed at a maximum of 28%. If you’re in a bracket below 28%, then you’ll be taxed on these gains at your usual rate.
Using silver to diversify your portfolio
Buying silver ingots, bars and coins is a good diversifier, which is vital if you’re to run a good portfolio. Diversification spreads out your overall risk and so it acts as a bulwark against your other assets if they suffer a sudden dip. Silver is also very buoyant because it has lots of industrial and medical uses (as well as jewellery) and more uses are found each year.
Silver is more flexible than gold
Hopefully they are just worries, but they’re out there – lots of people are concerned about the state of the global economy right now and some experts are expecting a big worldwide crash. While gold is the most popular choice for preppers, silver also has a place because it comes in smaller value units. Even a gram-bar of gold is worth more than a week’s groceries, whereas a few grams of silver will do nicely if you need to buy some food or get a ride somewhere.