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Safe Haven Investments and Why They are Important

The stock market is a treacherous domain, you don’t want to start trading or investing in stocks if you don’t know what is going on. You’ll often hear the terms “bulls” and “bear”. This has nothing to do with animals. Bulls are basically investors who will bet on securities rising and buying up assets with the belief that they will make money on the growth. Then you have the bears – investors who sell assets because they believe that securities are about to decline.

Gold bars

If there are more bulls, the asset values rise and profits are made. A bull run is often followed by a bear market that is driven by asset valuations nearing or reaching a point of resistance. This is when there doesn’t seem to be any change that the price of assets will go further than it already has.

Resistance and pressure from bearish investors will push the market to a bear market. In a bear market, assets are bound to lose their value. At this time investors will contemplate pulling out of the trades. This is a bit of a conundrum because if an investor pulls his money out he is more likely to get what he put in with no real returns to show for it. However, leaving your money where it is or holding on to and not giving in to the impulse to sell silver bullion can be bear fruits in the long term.

There is always a chance that you will experience some knocks but with precious metals like silver, it is better to buy silver bars or coins rather than stash dollar bills under your bed.

The best way to win in a bearish market is to have some safe-haven investments you can fall back on. What’s a safe-haven investment? Basically a safe haven investment is an investment that can hold or increase its value in times of economic crisis. There are other types of assets and investments that fall within the realm of safe-haven asset classes.

Silver bullion

When people consider investing their money they are more likely to think of actual cash. However, in a crisis, cash does fare well. The value of currency is subjective. After all, you can only get the cash that you put in yourself. The thousand dollars you had last year will still be a $1,000 today but it may not buy you the same things today because of inflation and other factors that affect currency markets. Safe havens like gold and silver gain in value over time when market conditions are turbulent.

The biggest reason why safe haven gain in value is supply and demand. When demand goes up, supply or the price of the product must rise.

Safe havens like silver and gold cannot be produced, the supply remains limited.  This leads to increases in prices and, ultimate gains for those who have invested in these assets.

Silver is a safe haven investment. It is after all the oldest form of currency. For quite some time, global economies backed their currencies with gold, silver, and other precious metals to provide stability within their economies. Currency rise and fall all the time but precious metals like silver and gold remain safe bets.

Bottom Line

Most successful investors know the importance of investing in safe heavens like silver and gold. Sometimes they take a bigger part of the portfolio or a smaller part. Buy silver bullion if you are looking to secure your financial future but before you choose between silver, gold or some other metal make sure you conduct as much research as you can.

Keep in mind that while all safe haven provide the same safe net, not all are equal. There are others that will grow fast, or grow slow. Know what you are getting yourself into.

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