Find out How to invest in silver
Silver has a poor reputation on the investment market. Contrary to gold, which considered a safe haven and a commodity with a great historical and economic significance, silver is practically underrated. As result, the interest in silver is negligible. Is investing in silver really unprofitable?
What is silver
Silver is a soft shiny metal with a greyish-white colour. As a good conductor, it is used very frequently in industry, and has a number of other properties that are useful for various sectors of the economy. Silver is also used in the decorative industries, for the production of cutlery and jewelry.
Most of silver that is extracted, that is over 55%, is used in industry and applied mainly in electronic technology and the automotive solutions. Silver is used for soldering elements of laptops, smartphones and, to a smaller extent, in cars, motorcycles and airplanes. Some silver that is being traded is alsoused for the production of mirrors and in the photography industry. Only a small amount of silver is left on the investment market. This is why investors who know perfectly where and how they should invest in gold have a much poorer knowledge on investing in silver. This is because silver is much less available for investments than gold, even though it is much more common in nature.
How to invest in silver
Like gold, silver is an alternative, commodity investment option. It means that the investor buys a tangible asset and keeps it, remaining responsible for all the aspects of ensuring safe storage and, later, for resale. Contrary to trading on a stock exchange or forex, the role of an intermediary in commodity investments (in this case, it is usually the mint) is only limited to the sale of the asset.
Why most investors decide to protect their silver coins or bars? First and foremost, everyone who has ever been interested in investing in raw materials, knows that it does not pay to have this type of assets stored by an intermediary. This is not the point in investing in silver or gold, because most investors choose this form of investment precisely because it allows them to store their wealth as tangible assets.
Before you buy silver, you should think of a safe place for storage. The oldest advice concerning the storage of precious metals, which is still valid nowadays, is that you better bury your silver in the ground and do not think about it until it increases in value. Paradoxically, a safety box in your garden provides much more security than a vault in a bank or at home.
What to look for when investing in silver
First of all, you should only buy silver from reliable sources. This is the basic advice for safe investments. The most secure sources of silver coins are mints – state-owned or private. Silver is relatively cheap, it may cost over ten times less than gold. This is means that even a middle-income British investor can afford to buy a box of one-pound coins. They all should have proper designations and be packed appropriately, along with a certificate.
There is also a special treat among coins – the rare ones which, apart from their nominal value and the price of metal from which they are made, have also a high value on the numismatic market. Such coins are usually not offered for sale by mints (unless the investor is willing to wait years until a limited series of coins significantly gains in value); instead, they are bought from private collectors. Such a coin should be inspected a numismatics expert, because, as a second-hand commodity, it may not be provided with a certificate. Only examination by a specialist may prevent an investor from purchasing a forged coin imitating a rare series, so you should not skip this step.
Position of silver on the investment market
Contemporary silver has a far worse position on the investment market than gold. This stems from the fat that while gold has been steadily growing in value for years, the price of silver is volatile and may experience a negative trend for several consecutive years.
Does it mean that silver is useless as an investment option? Not necessarily. First of all, large usage of this metal in industry improves its forecasts for the future, at least as regards investments. This is because silver is not renewable, and currently cannot be recycled from used electronic devices. Contrary to gold, which has been traded for centuries, silver is constantly in use, which means that it will potentially become even rarer.
How to invest in silver then? It is best to be cautious and choose long-term investments. This is because silver tends to gain in value after many years. An investor who decided to purchase this commodity must be patient and let this asset “rest” even for a decade. Under favourable circumstances, this investment may turn out to be very profitable.
