I'm considering opening a Roth IRA and investing in some mutual funds (such as a Vanguard fund). However, I've also heard that investing in silver bullion now is a smart move, as it is projected that silver will slowly climb over time and that it is a "safe" investment.
Should I stick to one or the other? Or both?
1 thought on “Should I invest in a mutual fund or Silver Bullion?”
Many people think about silver and gold as very solid investments by protecting people from inflation. However, it has been shown that gold and silver make lowsy long term investments. During times of volatility (like now or the last great depression), they tend to do well, but only if they were purchased prior to the volatility. Although Silver and Gold are rare and used to make jewlery, what can you actually do with it that is useful? Copper you can make wire. Iron you can produce cutlery, tools, buildings etc. Silver is a bit more useful than Gold, but when it comes down to it, not much. You may know about Switzerland and backing their currency with Gold and Silver. However, they have been slowly getting rid of it. Time has shown government bonds have produced better returns and preservation of capital (Miller et al.) .
Also you have to think about the individual costs. Silver and gold is heavy and so once you purchase it from a dealer, you've paid a lot in delivery fees, markups (by the bank, coin dealer, etc.), and other fees. Precious metal certificates purchased through financial institutions maybe another route, however they are still tacked with storage fees and management costs.
You may have a case with short term gain with Silver or Gold. If you want to invest in them, consider investing SOME of your money in an Precious Metal ETF (exchange traded fund). ETFs are like mutual funds, but they generally have less management fees, and are very liquid as they trade like stocks.Not only that, you will then be making money off the companies that mine silver and gold so you have access to cash flow from the sales and processing of Silver and Gold as well as metal price appreciation.
Definitely consider a wide range of funds. Prices are low now so if you don't need the money soon, mutual funds are the way to go. The best thing to do though is talk to a financial advisor and see what kind of things work best for you based on your income, goals and retirement plans.