Investing In Gold And Silver For Capital Preservation And Appreciation

Consider These Disadvantages to Owning or Buying Gold or Silver Bullion

Some people say there are no disadvantages to owning or buying gold or silver bullion. But, they are wrong. There are some disadvantages that must be considered before investing in order to make the best decision possible. Though they are few, there are still a few to be considered.


Some people say there are no disadvantages to owning or buying gold or silver bullion. But, they are wrong. There are some disadvantages that must be considered before investing in order to make the best decision possible. Though they are few, there are still a few to be considered.

The instability of the economy causes some to believe in these metals as the way to insure a sound investment. However, there is one risk that is directly related to this vacillation in the economy. This risk is deflation. In deflation, the dollar becomes worth more, and more valuable. This causes people to want to cash in assets and change to the dollar. This includes bullion. That means the value of the bullion will go down, and there will not be as many customers to sell it to.

For silver, a big disadvantage is that of having such a small market to start with. Thus, it seems the ups and downs are more severe. One must have the intestinal fortitude to weather these ups and downs with a sense of doom about each decrease in price.

Storage costs, as well as insurance and the cost of keeping your investment secure, are a disadvantage to owning or buying gold or silver bullion. Other investments don\’t have the same things to consider.

The added problem of the considerable bulk and weight is also a thing to contend with. You have to have the ability to handle them. Just 1000 oz of bullion consumes a very large amount of space, and weighs a lot. This increases the problems with storing it and keeping it secure.

Another consideration is that the prices of these precious metals are very volatile, going up and down frequently. Also, they don\’t pay dividends or return you interest. This is a couple more disadvantages that should be considered before buying.

Another negative to these metals is the historical pattern of not returning as high a growth as some other investments might. This fact is often overlooked in the heat of short term, high levels of growth. The dips tend to offset some of the growth, making them over time with not as good growth potential as other investments. Though gold and silver bullion has made great growth in the past four decades, so has lots of other things, like Microsoft and Wal-Mart.

Another disadvantage to owning or buying gold or silver bullion is the possibility of buying less than pure sources, meaning the metal is not as high as you might think you are buying, meaning your investment is not what you think it is. The cost of determining the purity can offset a large portion of possible proceeds. This occurs at both the time of buying or selling, meaning that the degree of profit is decreased to a degree.

Though these metals are good investments, they are not without certain risks. When deciding on whether or not to invest in them, all the pros and cons should be considered. They are good investments if all the advantages and disadvantages are considered, but not so if either is ignored. Like all things in life, there are risks involved. Overriding these risks, though, might well be the satisfaction of owning these precious metals.

To learn more about the disadvantages of gold or silver bullion, you can visit my blog at: Stephen Huston.com, where you can also receive FREE training on marketing your online business.

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