Investing in precious metals is ambiguous for many. A lot of investors and money gurus are preaching to stay away from investing in gold and silver while others are advising for it. So, where is the truth? I have my own experience with investing, mostly in silver and some gold. For some, it may look like a negative experience, but I consider it a great start.

The story

I started getting into the precious metals market at the beginning of 2011. I did some research, watched prices fluctuate, and finally bought my first twenty silver rounds sometime in January. The spot price was around $27-28/ozt. For the next couple of months, prices were slowly going up with minimal rollbacks. As the prices went up, I tried to accumulate a few ounces here and there. When prices increased more, I bought more, and this pattern continued until April. My purchasing average was in the mid to high $30s when the price hit $47.xx at the end of April. Of course, like many beginner investors, I didn’t want to secure my profits and sell at an all-time high. I probably thought it would go even higher and wanted to wait. As we know now, next month the price dropped by several dollars and stagnated for the next five or six months until another price slide to high $20s. As it was stagnating or falling, I continued to add to my portfolio, hoping it will trend up eventually.  

Historical silver chart

Fast forward nine years, gold and silver prices haven’t recovered but have dropped even lower. At some point, we’ve seen it at $13 but mostly in the $15 range. From first sight, you may think that there is nothing good in this journey, but there is. It taught me a few lessons that I believe are very valuable. 

The outcome

All these years, I accumulated silver and some gold, and my price average is around $16 right now. It doesn’t matter that I purchased my first ounces at an almost all-time high price. Since I continued buying at a much lower rate and most of my silver was purchased below $15, I’m positive even at the current spot price. Even though I became a little worse at this with the appearance of cryptocurrency, but I plan to stick to the plan and continue buying silver no matter what the price is. 

When the silver price fell below twenty, it seems like it can be a very long way up. This fact doesn’t bother me now, and I’m not discouraged at all. I learned to think of it as savings. Ninety-nine percent that it won’t drop below $10/ozt because of max supply available and mining cost. Also, it will always have value no matter what happens in the world. Another significant reason why savings in the form of silver is a good idea is that you won’t spend it as easy as cash. To spend it, you have to find a dealer, sell it, and get money from them. If it’s not an emergency, I would think twice before proceeding. Just for this reason, I didn’t touch my silver and had it saved up. If for any emergency or another purpose, you need this money, it’s not very hard to convert it into cash. 

There are many reasons why you should buy gold and silver. However, one of the main causes I continue to invest in precious metals is for a rainy day. Whether it’s a collapse of the dollar, a new monetary system, or another recession, precious metals could play a significant role in financial stability. I hope that we will never go through similar scenarios, but being a little more prepared gives extra peace of mind. 

When the prices of gold and silver dropped way below my first purchase price, the first thing that came to my mind is that it was a mistake. However, in a while, I started to think of it differently, and I don’t regret getting into that market. It would end negatively for me if I sold it at that time, but even a situation like this, you can turn in your favor with the right approach. 

Hopefully, this story encouraged someone to start investing or continue investing. What do you think about investing in precious metals and holding negative positions?