Investing in Silver: Complete Investment Guide
Why Invest in Silver?
Many people have probably heard the old advice that you can’t get rich by buying gold or silver. This is true. Much like gold, silver is known to maintain its value over time, which means you won’t be growing your wealth. However, it is a smart investment as part of your portfolio in order to help you preserve your wealth. It is a safe investment that won’t grow much over time, but it will help you maintain your wealth as a valuable part of your diversified portfolio.
Silver is not only used in the jewelry industry like gold is, but it is also used in the medical industry because it has antibacterial properties, and the technology industry because it is the most electrically and thermally conductive metal. Silver is a more practical metal than gold because it has a use in so many different things like the electronic industry, solar panels, and even glass. The many uses of silver are both a good and a bad thing. It is good because it means that the demand is high when the economy is good, but it is bad because when the economy is bad and a recession comes, the demand for silver in production goes down. This means that the price of silver will fall.
Recommendation: Investing in Junk Silver Coins: Top-to-Bottom Analysis
Silver also differs from gold in its volatility. Silver is more volatile than gold is, which is a good thing in the investment world. When an investment is considered to be volatile, it means that the price of the investment is more likely to fluctuate over time. While some investors are happy with the low volatility of gold because they use it as a means of maintaining their wealth, others would look to the higher volatility of silver as a way to earn a little bit more on their investment, rather than just purchasing a relatively stagnant investment.
Rules to Remember When Investing in Silver:
When you are in the market for silver, it is important to consider some rules that will protect you from getting a bad deal on your investment.The first rule is to always compare pricing between places where you are trying to buy silver from. Some places try to lure investors in with low prices, only for those investors to find out that they bought poor quality silver. It is important to compare prices and pictures of the quality of the product you are buying in order to ensure that you are getting the best possible product.
Recommendation: 4 Types of Silver Every Investor Must Have
This leads to the second rule which is to make sure you pay special attention to quality as well as confirmed authenticity. Not only are you vulnerable to purchasing counterfeit coins when you are trying to invest in precious metals, but silver can also be tarnished which lowers its value. If you don’t look closely to make sure that the silver has been properly cared for, and that it is real silver, you leave yourself open to the possibility of purchasing poor quality silver.
A third rule is to watch the price of silver around the time that you want to purchase it. Silver has more volatility than gold and other precious metals, which means that even if you buy it when it is high, you could have the potential to sell it for a better price. This is an important game to play when you are trying to grow your investments.
Finally, it is important to diversify your portfolio with other precious metals in order to protect your portfolio and dividends. As we have already mentioned, silver does have more volatility than other precious metals. This means if you are trying to diversify your portfolio with 5-15% precious metals, it is important to also diversify the types of precious metals that you include because others have a lower risk. This gives your portfolio a little bit more security in maintaining a portion of your wealth, which is generally the purpose of including precious metals in your portfolio.
Ways to Invest in Silver
Much like gold, you can invest in silver by investing in a silver exchange trade fund, or ETF, investing in silver production stocks, and investing in real tangible silver. A silver ETF is a fund that can be traded on the stock exchange. They are usually built around bullion assets which lets you own silver without the risks of owning actual silver. In addition, it allows you to sell much easier than if you tried to sell silver coins or bars.
Recommendation: Gold Vs. Silver: Which Metal to Invest In?
Investing in silver production stocks means that you are investing in companies that mine silver. Mining companies offer you the opportunity to grow your income because these companies are designed to grow. However, their growth is usually seen after a long period of time, and they have the potential to fail as well if the mine is not as productive with silver as they originally thought.
The final way to invest in silver is to purchase tangible silver in the form of bars or coins. When you buy silver coins, it is important to buy them from a reputable dealer. Most people buy them from online retailers now, so it is important to research these retailers and make sure that the product you are getting has a good quality and is authentic silver. A good tip when you are researching dealers is to find one that is a member of an industry group such as the Professional Numismatists Guild or Industry Council for Tangible Assets.
Once you have found a reputable dealer, you have to decide if you are going to buy bullion bars or bullion coins. Bullion bars will have the lowest premium because there is the least amount of labor required to produce them. Bullion coins will be more expensive because there is more labor that goes into making each coin, inspecting them, and sealing them in a protective case. This means that bullion bars will be your better value, unless you are trying to buy smaller amounts for their resale value.
When you are trying to diversify your investment portfolio and include 5-15% precious metals, silver is a good option to include as part of, but not all, of this 5-15%. Silver is a volatile precious metal which means that its price is subject to fluctuate. While this is good for earning money on your investment, it is not as good if you are looking for a low risk section of your portfolio. That being said, silver is still a good option to include in this part of your portfolio. It is important for you to determine what your goals are in your investments, and then decide if you will invest in silver in either an ETF, invest in a silver production company, or invest in silver bullion.
Recommendation: How to Keep Your Silver Bars Safe