Your SMSF and Silver Investments

Your SMSF and Silver Investments

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What are the advantages of a superannuation fund investing in Silver? First of all, it should be mentioned that silver like any other type of investment class has its ups and downs. To get the best out of your investment it is important to understand the industry and the pricing. First, you need to understand the basic nature of silver. For instance, silver is very volatile, whilst it can be used as a hedge or safety net, returns aren’t as spectacular as those of gold. If you have a superannuation fund and you want to protect these precious metals in difficult, economic, or political crises. That reason, alone should be enough to prompt an investor to add silver into their portfolio but many are wary because of the incredible price fluctuations silver goes through daily. With that in mind, let’s look at the pros and cons you would have to weigh especially when you want to buy SMSF silver bullion.

Benefits

This precious metal provides great protection against unstable markets

Silver is tangible money, unlike stocks and bonds which are more like promissory notes. These are vulnerable to inflation and can depreciate because of printing money. It is not an entirely safe market to rely on fluctuations but it isn’t likely to crash completely when markets tank because it has inherent value. It holds up against the monetary system and protects investors from the potential collapse of that system.

It’s cheaper to buy

It is cheaper to buy SMSF silver bullion than gold bullion. Not only is it cheaper but it is also more accessible than the yellow metal. It is also easier to liquidate than gold.

It offers higher returns than gold

Because silver is more affordable than gold, investors stand to see bigger gains when the price eventually goes up. During a bull market silver tends to outperform gold by a large margin. Between 2008 and 2011, silver gained over 448% which was a significant gain considering that gold gained only 166% within the same time frame.

Historically, silver has always performed well against all odds

For hundreds of years, silver and gold have been used as legal tender. Knowing that silver has always been valuable lends some sort of stability. It makes deciding to buy SMSF silver bullion easier. The fact that the history of silver has retained the allure and reputation through all this time means that most people know that buying a silver bullion bar or bullion coins comes with an assurance that the value will continue to persist trusting for years. It makes silver a great long-term investment. Given that superannuation funds are set up to last for years, it makes sense to invest in something that will bear fruit in the end,

Cons of buying silver for your SMSF

Liquidity is more of a pros than a cons as superannuation funds go on for years until retirement, so the issues of immediate liquidation is moot. It also becomes tricky when you have large bars to sell. You can’t just walk into a bank and ask for hard cash in exchange for a silver bar or silver coins. Nor can you just use them as currency.

Silver might be a good hedge but it doesn’t perform as well as other assets in terms of generating higher returns. Generally speaking, if you are looking for a short term investment asset, silver isn’t the ideal asset to invest in but if you are persistent and always willing to learn, you can get the most

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