The idea of saving early and often is widely publicized in financial media, and this notion is certainly grounded in some very time-tested and solid principles. In fact, it has been shown time and time again that those who start saving early in their working lives and continue to save throughout their working lives can amass some very considerable fortunes.
In our view, there are two things that make this possible.
- The power of compound interest
- The power of dollar cost averaging
Should you look to buy assets that pay dividends and also offer the potential for appreciation? Yes.
Should you buy assets that offer no dividends yet offer the potential for price appreciation and a hedge against any number of economic or geopolitical calamities? Absolutely.
And the earlier you get started, the better.
Time is the most precious commodity we have and nothing can stop its power.
As it relates to precious metals ownership, time offers investors a way to potentially enhance returns while lowering risk.
What do we mean by that?
Consider this: If you started buying physical silver at the age of 25 while silver is less than $20 per ounce, you could reasonably acquire many ounces-even on a smaller income.
Let’s assume for a moment that silver prices decline over the next year, and you keep buying silver but now at a cost of $17 per ounce.
Let’s further assume that silver declines the following year as well, and you acquire even more silver at $12 per ounce.
For argument’s sake, let’s assume that you spent $2000 on your purchases each of those three years.
This would have allowed you to accumulate approximately 387 total ounces of silver. In contrast, if silver had stayed about $19.50 per ounce over that three year period, you would have only been able to accumulate about 308 total ounces. If silver prices rose, you would have been able to acquire even less.
Now fast forward three years. The world has seen an economic collapse, with global equity markets declining by over 60 percent.
Silver, on the other hand, like gold, has seen extremely strong buying interest based on its reputation as a store of wealth and value. The price of silver has rapidly moved from $12 per ounce to $40 per ounce.
Your investment has more than doubled, and the higher silver prices go, the more your investment will have grown.
Even if you kept buying silver on the way up (which we believe you should do), your investment would still be performing quite well.
In our view, the bottom line is this: The more total ounces you have the better.
If or when silver prices decline, use it as an opportunity to buy more at a discount!
Forget about the potential price appreciation for a moment, and now consider another scenario:
What if there were a major dollar collapse and you had to rely on silver or other precious metals as a medium of exchange? What if you needed an ounce of silver to buy food, put gas in the car or pay the rent?
Once again, the more total ounces you have the better.
Physical gold or silver ownership should be viewed as a journey and not a one and done type of investment. Buying regularly may potentially allow you to dollar cost average, lowering your per ounce costs and possibly allowing your money to work harder for you. Who doesn’t want that?
While other instruments such as dividend paying stocks, ETFs or bonds may play a large role in your portfolio, you simply cannot afford to go “all in” on these asset classes.
If you don’t already have a plan in place to regularly acquire physical gold or silver, now may be the time to get started.
The earlier, the better.
You can even buy and hold these key precious metals within your IRA account. In our view, there is no good reason not to allocate a portion of your long-term investments into these metals, which not only have the potential to appreciate handsomely, but could also serve as a medium of exchange during an economic or geopolitical crises.
The earlier you get started, the more silver or gold you may be able to acquire. Call us today at 1-800-341-8584 to learn more.Tags: advantage gold, appreciation, compounding, gold, investing, portfolio, silver, time