Over the past few years, the price of silver has continued to rise higher and higher, surprising some analysts and making others a great deal of profit on their standing silver investments. There are a number of factors that have contributed to the rising price of silver at Monex, ranging from a shrinking silver supply to the stock market crash of 2008-2009. Understanding these factors can help you determine whether now is a good time for you to invest, and when the market is likely to plateau and eventually dip.
The price of silver at Monex began to climb in early 2008, and has skyrocketed in the past year in particular. There is a limited amount of silver in the world. Some estimates claim that 95% of the world’s silver supply is depleted, and only 5% remains intact. As a result, any increase in the value of silver leaves investors with a limited window to seize the investment opportunity. When prices begin to go up, they tend to go up more and more steeply (until eventually dropping steeply again).
One contributing factor that has affected the price of silver at Monex is the stock market crash that occurred in the US in 2008 and 2009. Coupled with the impact of the sub-prime mortgage bubble bursting just a year or two before that, the American national dollar has been put into a position of instability. Investors are anxious about entrusting their wealth to such a destabilized currency. As a result, many are looking to put their wealth outside of their national currency, thus hedging against the possibility of further devaluation and resulting inflation concerns. Precious metals (like gold and silver, but also platinum and palladium) give investors just that opportunity. While they might buy a commodity investment with US dollars, the profit potential of such a commodity isn’t tied to US dollars. Instead, it’s tied into a commodity that is international in nature and essentially exists beyond the purview of national borders.
If you’re eyeing up the price of silver at Monex, and deciding if now is the time to invest, the answer is yes. The much more difficult decision will occur when you’ve got your silver investment on hand, and you need to determine when to sell it off and liquidate. When the silver market drops, it tends to drop quickly, making rapid decisions key to keeping any yield you’ve seen on your investment. The most sure-fire strategy with silver is to sell off when the market begins to plateau, and before it drops.