Silver
Silver Returns vs S&P
27.10%
Versus S&P
•
17 hours ago
27.10%
Versus S&P
•
17 hours ago
6m High
6m Low
Silver
$35.71
$27.06
S&P 500
60.26
46.10
Silver
S&P 500
Does not follow the stock market
Sources: SLV, SPX
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Highlights
Good For
Hedge inflation + add diversification
Time Horizon
6-36 months
Diversification
Environmentally Friendly
Silver can be a way to add an element of diversification to your portfolio, thanks to its fairly weak positive correlation with traditional assets like stocks and bonds. It can also offer a hedge against inflation, due to the fact that it's a physical asset with an intrinsic worth, unlike dollars or other currencies. However, because silver is also an industrial metal, its value is heavily influenced by shifts in the global economy, making it susceptible to price volatility. Silver prices have been found to be twice as volatile as those of gold dating back to 1996 as measured by standard deviation. While this volatility can offer the potential for sizable short-term gains, it increases the downside risk and doesn't make silver great as a long-term growth asset.
Did you Know
First used as a currency in 700 B.C., silver has had a role as a trading metal in almost every culture both ancient and modern.
Silver is used across a vast range of industries and is part of almost every computer, cell phone, car and appliance.
Over half of silver's demand comes from tech and industrial uses, with the rest coming from investors.
Considerations
May provide a hedge against inflation
Adds diversification to your portfolio
Offers a less expensive way to invest in a precious metal
Reasons to Invest
Potential for high price volatility
Vulnerable to shifts in technology
More sensitive to economic slowdowns
Drawbacks
How You’re Taxed
Capital Gains
Holdings in precious metals like silver are generally subject to capital gains tax. As far as what rate applies, the IRS classifies silver as collectibles, meaning the collectibles capital gains tax rate of up to 28% may apply to both physical silver holdings and silver ETFs. However, this would only apply if you sold your silver holdings at a gain, with the rate also depending on how long the asset was held, among other factors.