Are Silver and Gold Liquid Investments?


Are Silver and Gold Liquid Investments? By www.ProfitableInvestingTips.com Investors seek a combination of security and
liquidity. Silver and gold are typically thought to be sources of security and good inflation
hedges. But, are silver and gold liquid investments? Before posing the question, are silver and
gold liquid investments let’s look at what constitutes investment liquidity. Liquidity
is the relative ease of turning an investment into cash. Investments like real estate are
hard to turn into cash in a hurry, unless you have a loan agreement with a mortgage
lender in which you can draw on the equity of your property. Stocks are typically liquid
investments but when the market crashes you may need to sell at a terrific loss in order
to see your cash. Even then you will not have ready access to cash for a day or two unless
you can transfer it electronically from your trading account. Bank accounts are probably
the most liquid unless you consider raiding the children’s piggy bank. We have posed the
question before, is silver a good investment. Now, are silver and gold liquid investments? There are two sets of answers to the question
are silver and gold liquid investments. The answers have to do with how to buy silver
and how to buy gold for investment. Traditional gold and silver bugs buy and hold gold and
silver bullion, either as bullion coins or bars. Alternatives are to buy mining stocks
or, especially in the case of gold, exchange traded funds that track the value of gold.
In the first case the individual needs to bring or send his gold to a dealer in order
to sell it. In the second case the individual can buy and sell stocks online and move his
money to a money market account with his brokerage firm. Gold investors with a more than a few
ounces of gold will commonly keep their gold in a secure storage facility. These facilities
are always separate from the offices of the gold dealer from whom the individual buys
or sells gold. Thus it is not just a matter of going to the safety deposit box and taking
a few bars or coins to the dealer to sell. A large quantity of gold or silver may require
an armored vehicle and security guards. Investing in gold stocks and exchange traded
funds is a means of maintaining liquidity while taking advantage of the investment advantages
of gold. The same applies to silver mining stocks. Are silver and gold liquid investments
in the cases of mining stocks and exchange traded funds? They certainly are. There are
advantages and disadvantages to investing in these vehicles but lack of liquidity is
not one of them. Gold and silver mining stocks will typically outperform bullion in a rising
market and fall faster in a down market. A well designed and managed ETF will typically
do a good job of tracking the price of gold bullion and will offer the advantage of instant
liquidity when trading such stocks online. So, in the end, are silver and gold liquid
investments? It depends on how you invest. For more insights and useful information about
investments and investing, visit www.ProfitableInvestingTips.com.

Leave a Reply

Your email address will not be published. Required fields are marked *