Whenever you look to establish yourself as an independent investor, you are faced with considerable choice in terms of your market and preferred derivative. Whether you are looking to invest as your sole source of income or to fund a burgeoning business start-up, it is crucial that you apply knowledge, instinct and common sense when executing even simple decisions.
This is especially true in the current economic climate, which has started the second half of 2015 on uncertain ground (despite the decision of the European Central Bank to embark on a 60 billion Euro bond-buying program during the second quarter).
On the Silver trail: Basic knowledge and understanding
If anything, there is a certain level of separation between the current economic climate and the prevailing level of stock market growth. This is why many investors are turning to so-called safe investment options such as precious metals, each of which has their own unique profile and clearly defined benefits for traders. It is important to develop an understanding of silver in the modern age, however, as its historical profile has changed somewhat over the course of the last five years.
Historically, silver was entrenched firmly in the shadow of gold and valued primarily as a purposeful, manufacturing material. This began to change at the peak of the global recession in 2010, however, when silver, platinum and even palladium earned stunning gains as the threat of a global currency debasement loomed large. Silver in particular experienced exponential growth in the subsequent 18 months, outstripping gold for a short period of time and establishing itself as a safe-haven of wealth in the process.
Silver as a modern investment option
As a result of this, sliver provides a different investment proposition that it did prior to 2010. Whereas it previously delivered a consistent performance but rarely scaled the heights of gold, it is now considered to be a secure source of wealth that experiences peak and troughs like any other precious metal. In generic terms, this means that while the demand for silver soars during times of economic decline, it falls when sentiment improves and the market experiences growth.
This is evident in real-time trends, as silver has experienced a fall in demand and prices during the last month. Gold losses also extended to a five year low, with U.S. economic data revealing considerable economic improvement and considerable backing for higher interest rates.
With sentiment lifted, investors have turned their attention away from so-called safe haven options and explored the more volatile worlds of currency, stocks and variable equity portfolios. Those that do continue to invest in silver must have knowledge of current and future economic trends, while also being able to access favourable market prices through resources such as BullionVault.
How should Silver traders react?
The analysis of historical and real-time data is crucial if traders are to profit, especially in relatively predictable markets such as precious metal. Unless you have a long-term investment outlook and can confidently predict that silver prices will increase within a specific timeframe, for now you may be better served by turning your attentions elsewhere.
With the economy set to grow throughout the third financial quarter, the forex and stock markets may offer greater value, especially for investors with a short-term outlook. It was recently reported that the rate of insolvencies in the UK had fallen by 11% at the beginning of 2015, for example, suggesting that equity investments may provide better returns in the near future.