Can Silver Help Canadian Investors Protect Their Money from Inflation?

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Inflation concerns in Canada are the highest they’ve been in decades, as inflation itself tops rates not seen in thirty years. Food, energy, and transportation are leading rising costs as inflation hit 5.1% in the early part of 2022, with few signs of slowing down for the rest of the year. And for residents of Toronto and the GTA, they’re also coping with skyrocketing real estate and rent costs.

The rising cost of living has many Canadians worried that their savings and investments are being devalued. Anyone who keeps a substantial amount of savings in cash, such as an emergency fund, is watching high inflation and seeing their hard-earned savings lose value in real time. If you had $10,000 parked in a bank account, and the annual inflation rate was 5%, it would be like losing $500 on your investment, in terms of what that money could buy you.

Canadians are seeking out assets that will help their wealth weather the storm. One such option is silver bullion.

How to Buy Silver in Toronto?

If you’re not sure where to buy silver in Toronto, you have no shortage of options. The city is home to a wide range of bullion dealers selling silver coins and bars, as well as gold, junk silver, and starter kits for beginner investors.

The advantage of buying physical bullion is that you have direct control over the asset. Investors appreciate this quality because it:

  • Takes third-party risks such as mismanagement and malfeasance out of the equation;
  • Provides an assurance against political upheaval and major crises;
  • Can’t be frozen or seized as easily as digital assets.

Buying silver coins and bars in-person also allows you to see what you’re purchasing before you commit. It provides a layer of confidence that many investors appreciate.

How Silver Works as an Inflation Hedge

Silver is a fascinating asset because it has two roles in the global economy. First, it’s a commodity with numerous industrial uses, including electronics. The growth of EVs and renewables infrastructure are reason enough to be bullish on silver prices, as silver plays an important role in these industries.

More generally, commodities have a unique relationship with inflation, in that commodity prices tend to indicate inflation to come. Higher raw material costs tend to lead to a higher cost of goods. In other words, if the cost of things is outpacing investment growth, it may be wiser to invest in those things. Commodities are a way of doing just that.

Silver also has a close relationship with gold. Gold is often seen as an alternative or original currency. It’s what used to back paper money, and investors seek it out as they lose confidence in the long-term value of cash. 

Other Investments to Include in Your Inflation Hedge

As with all investments, it pays to diversify your assets and spread out both risks and rewards. Buying silver alone has considerable risks, as would only buying stocks. If you’re investing to protect your wealth against inflation, you can also investigate high-growth stocks in the hopes that they can outpace inflation, real estate and REITs, and high-yield bonds.

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