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Investing in silver
Investing in silver has many different possibilities. In recent years, it has been shown that investing in silver can produce returns that can exceed the performance of investing in gold. Consequently, it is often seen as an attractive investment for investors. The popularity of silver has grown many times over in recent years due to the increasing demand for silver from the industrial sector. In fact, about 85% of all silver worldwide is used for industry. In particular, silver is used in modern devices such as smartphones and solar panels. The rising demand for silver makes it an interesting investment.Silver is often considered a raw material for industrial use and jewelry making. Therefore, the value of silver as a precious metal to invest in is often underestimated. The price of silver correlates with the value of gold, forgetting the historical monetary relevance of silver. Therefore, investing in silver is actually a smart investment for protecting your wealth. An added advantage of investing in silver is that you can physically own the silver. You are therefore the full owner of your own silver stock.
VAT charges when investing in silver?
As an individual, it is wise to take into account any VAT charges when purchasing silver. Silver in the form of bars is, as we saw earlier, considered an industrial product. For this reason, silver bars are taxed at 21% VAT. As an individual, you cannot reclaim this 21% levy. Investing in silver via silver investment coins is a more attractive option in that respect. This is because investment coins are considered legal tender and have a silver content of at least 99% pure silver. Investment coins are traded under the margin scheme. This means that VAT is only deducted from the dealer's margin scheme. Further information about investing in silver can be found in The Silver Mountain's knowledge center.
Silver price
The price of silver investment coins and bars is in flux 5 days a week. The fluctuations in the price depend on all the global transactions that take place around silver. Sellers “charge” the asking price and buyers “bid” the offering price. The difference between these two prices is also called the middle price. The average of all the middle prices, forms the final price. The price of silver has experienced tremendous growth in recent years. The peak moments were mainly in 2010 to mid-2013. During the time of the economic crisis, people started investing heavily in external assets to ensure that assets were “protected” from devaluation. When the end of the crisis was in sight, people started selling silver again, causing the silver price to fall. Since 2016, a rise in the silver price has been visible again.
Investing in silver at The Silver Mountain
You can check the current silver price in our webshop, at the top right of every page. The prices on the site are automatically adjusted to the current silver price every 5 minutes. In addition, the prices of the products in the webshop also change automatically in line with the real time rate. As for silver, you will find various silver investment coins, kilo coins and silver bars at The Silver Mountain.Further information on investing in silver can be found in our knowledge centre. You also have the opportunity to visit our office location for a personal consultation. We are located at Villa Elias, Faas Eliaslaan 13, 3742 AR in Baarn and at Prins Hendrikplein 14, 2518 JC in The Hague. Please contact us in advance by phone: 035 20 31 380 or by email at info@thesilvermountain.nl.
Here's how to start investing in silver today
Investing in silver can take the form of silver coins and silver bars. Although silver bars are cheaper to buy, they are less interesting if you buy silver as an individual. This is because silver bars are taxed with 21% VAT and you cannot reclaim this VAT as soon as you sell the silver again, making the difference between the purchase and sale price much higher than with silver coins. For this reason, silver coins are always the cheapest option as an individual. Besides the fact that silver coins are cheaper to buy, you also get considerably more back for coins in the future.
Research shows that timing the market, or wanting to determine the right moment to buy physical silver, does not work. Even professional investors fail to buy at the low point and sell at the high point. This is because the market cannot be predicted. In our experience, many customers choose to buy physical silver on a monthly or quarterly basis. In doing so, it is important to take a long-term view.
To help you further on your way, The Silver Mountain has written a Silver Guide in which everything is explained about investing in silver. We also have a Choose Guide in which you will receive a personalised offer tailored to your needs using a number of questions.
The benefits of investing in physical silver
Silver is widely used in industry. About half of the annual mining production is consumed in industry. Silver has many different applications, for example in the production of computers, mobile phones but also solar panels. In addition, silver has antibacterial properties and is also widely used in medicines for this reason. This silver often disappears from the market because it cannot be recovered. The underground silver supply is becoming less and less due to annual mine production, which makes the precious metal rarer and may eventually make it unavailable altogether. Many of our customers choose to invest in silver for this reason, with the underlying idea being a potential price increase due to industrial applications and the annually declining silver supply.Important to take into account is that the silver market is a lot more volatile than the gold market. As a result, investing in silver involves more risk compared to gold, but there is also a higher return to be had in the short term.
Silver as protection against inflation
Silver, like gold, is seen as a safe haven in times of economic uncertainties. Investing in silver can be a good investment because of the silver shortage and the rising demand for silver, as silver has a high industrial application value. Indeed, the silver shortage affects various sectors of industry and can lead to higher prices and scarcity of silver.Performance of silver as an investment in recent years
An investment in silver has delivered an average annual return of 9% over the past 20 years. The unique properties of silver make the precious metal an industrial-grade investment metal. Since the year 2000, the demand for silver has exceeded the supply, meaning that there is an annual shortage and this silver shortage is only expected to increase.Frequently asked questions about investing in silver
Why invest in silver instead of gold?
Silver is increasingly used in technological products and its unique properties make it very suitable for medical purposes. Because it is so important and it is used in small quantities, the price is completely inelastic. If the price of silver increases by $1,000 per troy ounce, and Apple needs 1/10 troy ounce to make a computer then the price of this computer will simply be increased by $100.
Besides, there are no large stocks of silver. We have consumed more silver in recent decades than we have extracted from mines, so the amount of silver is decreasing every year.
Also, silver is always very much in the shadow of gold. Silver is only named at the time when prices fall sharply. Silver - unlike gold - has a strong industrial component. Partly because of this, the silver price depends on developments in the investment world like industry. Finally, you buy more silver than gold for the same amount, as silver is many times cheaper than gold. This makes silver interesting for investors with smaller assets.
What should you consider when investing in silver?
With silver, the most important thing is to choose the right product. Bars are, for individuals, taxed at 21% VAT. Coins are often the most attractive choice for this reason.
The silver price is also a lot more volatile compared to the gold price. For this reason, it is important to take a long-term view with silver.
But storing and transporting your silver is also important to think about. Silver is a lot cheaper than gold, which means that for a high amount of money, you buy a relatively large amount of silver. For example, a full sample box (500 coins) weighs more than 15.5 kilograms and can be compared to a shoebox in terms of size. At The Silver Mountain, you have the option of having your silver stored safely, insured and allocated at our partner Edelmetaal Beheer Nederland (EBN).
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