Investing in Silver – Is Now the Time?

Attempting to predict the prices for anything is difficult to do, and silver is no exception. If you are interested in investing in silver, you should know that the performance of gold directly affects the price of silver, and here is why: in the years leading up to the 2008 panic of the stock market, it took about 55 ounces of silver to equal one ounce of gold. Today, however, about 50 ounces of silver can buy you an ounce of gold, putting silver at about $28.50 per ounce as of the end of 2010.

The lesson here is that the more affordable option of investing in silver is likely to grow more than gold, especially because this 50:1 ratio could continue to decline into 2011, meaning the price of silver will continue to increase as the year progresses. As an investor looking at investing in silver-the “other” precious metal-you are certainly eager to learn how the purchase of silver is accomplished. While gold has the greater appeal when it comes to investing in precious metals, silver is certainly high on the list as well. Like gold, the prices are volatile and literally change day to day.

As someone interested in investing in silver, you must know the importance of continually comparing the ratio of silver to gold costs. It will tell you how much silver it takes to buy one ounce of precious gold. The historical average is 16:1, but clearly, based on its current 50:1 ratio, this amount fluctuates tremendously over time. One popular way to put your money into silver is to utilize a method called dollar cost averaging. This proclaims that you should put money into silver on a regular basis each month to spread your risk over a longer period of time. However, with the prices of silver only expected to increase in the coming year, now may the time to put your money into the market and sit back as you watch the value of it grow.

In 1933, with the country deep in the Great Depression, President Roosevelt signed an Executive Order forbidding US citizens from owning gold, thus forcing the public to turn in their gold for a set $20.67 per ounce. In this EO, there is was no mention of silver, which is a fact that can be counted on for those who are interested in investing in silver but are still worried about the possibility of future silver confiscation.