Posted 17th enero 2024

How Much Silver Should You Own?

how much silver should you own

In this post, we’ll explore how you can include silver in a diversified portfolio. We’ll consider the pros and cons of physical and digital silver. Finally, we examine how exposure to the silver market might benefit you during a financial crisis.

The Average Silver Allocation in a Portfolio

Physical vs Digital Silver

For many investors, physical ownership and possession is important. It can give a sense of satisfaction and security because you know you have this asset that legally belongs to you, proven through full title ownership.

However, owning physical silver comes with its own set of challenges. Securely storing silver, particularly in large volumes, requires a safe or a vault. You can opt for third-party storage solutions like safety deposit boxes or a secure facility but this involves ongoing fees. In the interest of security, investors also consider insurance in case of theft, loss or damage. Liquidity is another factor. When you sell silver, you’ll have to transport it to a buyer or a dealer. They’ll then need to verify ownership, authenticity and purity which takes time.

Digital silver, on the other hand, offers the convenience and liquidity of electronic trading.

You can buy and sell silver easily in its digital forms. You store it in a digital wallet or a brokerage account. If you want to trade in silver regularly, digital versions are a lot more convenient. There are downsides, however. The ease of trading may mean more rapid price fluctuations, influenced by market sentiment and economic outlook.

There is a third option for investors who want the benefit of silver in both digital and physical forms, Kinesis Silver (KAG).

One ounce of fine silver backs every KAG, with legal title ownership in the name of the holder, held in fully insured, audited vaults. Unlike allocated digital silver where ownership remains with the seller. Kinesis platform users pay 0% storage fees to hold their metals in secured vaults.

Liquidity, often an issue with physical silver, is not a problem with KAG. You can easily trade, send, spend, or redeem your silver holdings. These are versatile digital assets that offer immense utility, with the added backing and steadfast stability of physical silver.

Ultimately, the decision between physical and digital silver comes down to personal preference and your specific investment goals. With KAG, you no longer need to choose between the tangible security of physical silver and the convenience of digital.

The price of silver (measured in troy ounces) can fall during economic downturns. This is particularly the case if industrial demand for silver falls. In these situations, the gold price may hold up better.

A general guideline is for silver to be part of the  5-10% apportioned to precious metals, including gold, in an investment portfolio. It’s important to consider investing on a case-by-case basis, as well as the macroeconomic environment at play but the case for silver is looking stronger now than it has done for many years.

Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News. 

As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.

This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.