Precious Metals Investing in 2011: Gold, Silver or Both?

When it comes to precious metals investing, many investors wonder if they should buy gold, silver or both. The core component to wealth building strategies in precious metals investing should be in direct correlation to the needs of the investor however both gold and silver have their strong points. Experts have measured stock/flow ratio, store of value, demand from central banks, scarcity and gold/silver ratio. You can analyze those factors all day, but it all seems to come down to affordability and taste.

Buying Gold for Precious Metals Investing in 2011

Many investors choose gold regardless of affordability because they simply have an affinity for gold itself. If they cannot afford gold bards or 1 oz gold coins they opt for the smaller one tenth gold coins. The downside of this precious metals investing strategy is that it proportionately commands a higher price due to mint or dealer mark up.

Typically the smaller the coin, the higher the additional costs are in relation. If you are buying gold as an investment it is far better to buy larger denominations such as 5 ounces+ or a kilo gold coins.

Buying Silver for Precious Metals Investing in 2011

Buying silver as an investment, for some people, is economically the more viable option. Comparatively speaking, an ounce of silver is much more affordable than gold and in fact affordable for just about anyone. Compare precious metals investing prices in 2011 of silver at $35 per ounce vs gold at $1500 an ounce. With silver at these levels it is possible to buy one or two ounce coins or even one kilo silver coins.

This is looking at the purchase of silver coins from a purely investment standpoint and not as a collector. Collector coins such as Morgan dollars and Peace dollars may command a higher premium for their rarity.

Striking a Balance between Gold and Silver Investing

Perhaps one of the most sound strategies in 2011 for precious metals investing is to find some balance between buying gold and silver as an investment. Even if you are a heavy gold investor you can still diversify your precious metals portfolio gold to silver 70/30 or 60/40 .

So for every 6-7 ounces of gold you purchase you can purchase 3-4 ounces of silver and strike a happy medium. The upside is that gold and silver precious metals are real money hard assets with true liquidity when it’s time to sell.

» Contact Cornerstone Asset Metals today to learn more about buying gold and silver for precious metals investing in 2011.

Past performance is not an indication of future potential values.