There’s more than one way to secure your financial future. An eternally popular option is to invest in precious metals such as gold and silver. These metals have a five thousand-plus history as an investment, and that shows little sign of ending anytime soon — in fact, in an age of increasing economic uncertainty, the opposite is true.
In this blog, we’ll take a closer look at gold or silver stacking, including what it is, the differences between the two, the benefits, and common stacking strategies that investors can follow.
What is Gold or Silver Stacking?
Gold or silver stacking is the process of accumulating gold or silver over a period of time. Investors who use this method buy physical gold or silver, which they keep safe for future use. Some investors sell when the price of their chosen metal rises, but many accumulate the metals indefinitely because of their general security. Gold and silver are considered to be ‘inflation proof,’ which means they offer greater peace of mind compared with other investments.
Stacking is not the same as other forms of gold and silver investment. People that engage in silver or gold stacking buy physical forms of the metals, such as gold bars, gold coins, silver bars, and silver coins. They tend to keep them in a secure location on their property, though it’s also possible to keep the physical assets elsewhere.
A Key Difference Between Gold and Silver Stacking
Gold and silver stacking are broadly the same. Investors can expect broadly the same outcome regardless of which metal they choose.
However, there is one key difference: space. Gold is much more ‘space-friendly.’ You would need around 80 silver coins to have a value that equates to the value of one gold coin. People who do not have much storage space in their homes tend to prefer gold since you can store more of it in a confined area compared with silver.
Other Differences
Some other differences to be aware of include the following:
Silver is Cheaper
Silver is much more entry-level-friendly. If you were to invest the same amount of money in gold or silver, you’d find that you end up with much more silver than you do gold.
Silver is More Volatile
The price of silver tends to be a lot more volatile than gold, which is generally pretty consistent. This can be a good or bad thing. In general, investors in silver have more opportunities to profit from their investment since a spike of 10% in a day is not uncommon. However, if you’re holding on a long-term basis, then this may not be too important.
It Can Be Harder to Sell Silver
It’s usually pretty easy to find a buyer for gold because the market is so large. The silver market is smaller. Investors looking to offload their silver stash quickly would have more difficulty than a gold investor. Though again, many stackers never intend to sell, so this may not be a determining factor.
The Benefits of Stacking
Now you understand what gold and silver stacking is, let’s take a look at why people do.
It’s Tangible
People usually make abstract investments. That is, they can’t see or feel the investment; they just have faith that it’s there. But as we’ve seen time and time again, the institutions we entrust with our investments don’t always act in a trustworthy manner.
Gold and silver are investments that you can literally hold in your hand. That gives peace of mind that your investment is safe.
It’s a Store of Value
Gold and silver have proven to be extremely robust stores of value. And we’re talking over a period of thousands of years. Indeed, in the past twenty-one years, gold has actually outperformed stocks and bonds as an investment.
It Can’t Be Hacked
Digital assets have their advantages. But they also have their weaknesses. A single hacking attempt can result in a complete loss of investment. So long as you have a secure safe in your home, your investment will always be safe.
It Can Be Private
You may have reason to want to keep your investments private. Unlike virtually every other investment, your silver or gold investment can be confidential.
Common Stacking Strategies
The right stacking strategy depends on your personal situation. Some stackers buy incrementally, slowly adding to their collection over a period of months, years, and decades. Other investors who have a windfall of cash to play with may make a significant investment in a single swoop. If that approach is taken, it’s best to wait until the price of the metals is lower than usual.
Conclusion
There’s value in investing in silver or gold at any period, but it becomes especially attractive during times of economic uncertainty. If you’re looking to get started with stacking, then get in touch with us here at The Gold Bullion Company.
