Is Silver a Liquid Investment?

Last week I spoke with a number of people who were looking into precious metals investing and seeing if it was the right investment for them. One man named Andy, whose friends had been trying to persuade him to buy silver for some time, would not grasp the idea that silver was a worthwhile investment. When I asked him why not, he replied, "If I buy silver now and then need to sell it in a couple of years, it will be impossible to exchange it for cash!" Andy's concern is one that many investors, including myself, have at some point in time. In this post I would like to answer the question, "Is silver a Liquid Investment?"

I remember when my wife and I purchased our home. The day before closing on the house we received the settlement statement with the total down payment due. We had miscalculated the amount, and the savings we had counted on were not enough to make the down payment. We could earn that difference in about a month's time, but we didn't have a month; we had less than 19 hours to get it! Where could we find that money?

We had previously invested in silver, but of course, the title company would probably not allow us to walk in and dump a box of silver bullion rounds on the table for our down payment. I needed to liquidate a portion of our silver, and QUICK in order to make the payment on our home.

The next morning (the day of closing and making our down payment), I started by calling the two coin shops that I was the most familiar with, to see what they were paying for silver that day. The first dealer was buying 1 ounce silver rounds at 15 cents under spot and the second was buying at 10 cents over spot, depending on the condition of the rounds. We were able to sell a small portion of our 1 oz. silver rounds that same day and get the cash to make our down payment. And we were able to do it by contacting only two of the hundreds of places that would have bought our silver. The most exciting part was that from the time that we had bought the silver, its worth had gone up over $3.00 per ounce.

I am not recommending that anyone sell their silver now because I expect it to continue rising in price, but for Andy and anyone else who is debating between buying or not buying silver because of liquidity. . . I assure you that it is an extremely liquid investment. Silver is one of the most cash-like investments I have encountered.