Gold & Silver Investment: When Is the Right Time?


Investing in precious metals as part of an investment portfolio is a smart move but it can also be very daunting for first-time investors. Even if you try Googling for various articles, it's clear many of them are written by long-time investors who forgot what it's like to approach precious metal investing for the first time. Why can't someone give some basic rules of thumb to get started?

Fortunately, here is your quick-hit guide to starting with precious metals investing. Keeping it simple so you grasp the very basics before diving further in to see if gold and silver are right for your portfolio.

When Is It Good To Buy Silver?

Silver might not have the shine of gold or other higher media profile precious metals, but it is an excellent investment option for multiple reasons. For one it's cheaper than gold, making it more accessible for middle-class investors.

There are also reasons to simply love the potential that silver is showing right now.

1: Bull Markets

Silver is outstanding as a precious metal during recognized bull markets. In fact, it outperforms gold by quite an impressive margin while also less expensive to get in on. Here are two examples of the biggest lows leading to clear bull markets into highs.

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1970 to 1980: 3,105% gain for silver vs. 2,328% for gold
2008 to 2011: 448% gain for silver vs. 166% for gold

In other words, silver might not be the pretty cousin of the group, but it outperforms the glitter of gold when it comes to pure profits.

2: Right Now (If You Believe in the Green Energy Boom)

Less silver is mined than before, but silver is an important component for many solar panels. This means if the trend towards sustainable green energy continues, and you think solar is going to be one of the front runners in this, then it's a good time to roll the dice on silver since demand is skyrocketing as supply isn't matching.

When Is It Good To Buy Gold?

Gold is a classic precious metal that has been valued as such for thousands of years. Investment in gold is seen by many as one of the safest ways to protect against inflation or the massive drop in the value of the currency. Gold has long been seen as a safe way to invest in troubled times.

1: When Crude Oil Prices Shoot Up

Oil and gold prices have a strange relationship. While there's no reason for them to be connected, most of the time they do tend to reflect each other. When crude oil prices are going up, the value of gold tends to go up, as well. On the other hand, when the prices of crude oil tend to drop, gold prices usually struggle, as well.

This isn't true 100% of the time however it is something to keep an eye on as it can be a big tell.

2: When the U.S. Dollar Weakens

When the USD is strong and people are encouraged about news coming out for the U.S. economy is hot then the value of gold tends to even out or drop. On the other side of it, if the U.S. Dollar is looking weak or a recession is looming, investor money tends to flock to gold, driving prices up. Getting in before the main crowd when this happens can lead to an incredible return on investment.

While there's definitely more to learn if you keep that information in mind for these two popular precious metals you'll be in a great starting place with your portfolio.