Did I Miss Out on Silver

Silver closed out 2010 approaching record highs. This metal—usually thought of as second-best to gold, unfortunately—has a lot to offer investors. In particular, the fact that it’s priced at a fraction of what gold costs makes it a great investment for those who don’t have a lot of money to start. The performance of this metal, however, makes it sensible to ask whether or not the boom is over.

Silver is used in a host of industries. Even though it is rare relative to other elements, it is abundant compared to metals such as gold and platinum. This means that it’s used for rather mundane purposes, such as in cellular phones, fillings in teeth, silverware and so forth. This gives the metal appeal to a wider demographic than the investing crowd. Industries need this and, if they start going full-bore this year—many economists predict that this year will see things pick up considerably—they’ll be buying silver, in many cases. This means that the price still could rise, and many investment advisors remain bullish on silver investments.

Sometimes, new investors see that something is performing very well and regret that they didn’t buy into that commodity or company when it was cheap. In reality, expecting to get rich in this way is the exact same thing as gambling; low odds, high stakes. Silver, however, doesn’t seem to be going down in price at all. It’s hard to believe how inexpensive this metal was 10 years ago—closer to $5 than $50—when you look at the prices today. If someone had regretted not buying silver when it was $5 an ounce and decided it was all over already when it reached $15 an ounce, they’d be losing out right now. It’s easy to see how you can convince yourself to pass up good opportunities in this way.

If you’re thinking about longer term investing, what the record prices in silver do establish is that the metal can increase in value a lot over a relatively short period of years. This may happen again and again if you hold onto your investments for a long time. This is one of the reasons that you haven’t missed out on silver, especially if you’re a longer-term investor. Right now, someone is looking at gold they bought in the 80s for around $300 an ounce, and probably smiling.

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