Silver is an attractive investor commodity for many factors. Silver is a precious metal and has the reputation of increasing in value alongside gold, however, it is cheaper than gold.
During the mid and late 2000s, when the bullish stock market was handily outperformed by gold, gold was outperformed by silver by a great margin. Asset allocators usually recommend their investors to have at least 10 percent of their investing portfolio in precious metals.
Within this 10 percent allocation, quite a few investors are seen giving preference to silver over gold, thanks to silver’s explosive potential. However, silver’s downward volatility is equally vigorous as well. There are many ways for investing in silver; however, the method of investment must be consistent with the investment goals of the individual.
Pros and Cons of Investing in Physical silver.
Purchase physical metal if you are seriously considering investing in silver. There are quite a few investment grade varieties, ranging from silver bullion minted by governments, such as Canadian Maples, U.S. Eagles, and UK Britannias to silver bars manufactured by mining and private minting firms.
These can be bought from online auctions, local shops, and also by sending mail orders to bullion dealers. Thanks to the comparatively lower silver price tag, a major investment can get one legal possession of a few tons of this metal. Therefore, it is very unlikely that moderate or large investors would allocate or channel their entire investment budget into physical silver. However, having some in the investment portfolio would give the peace of mind imperative for tackling the worst economic and financial calamities.
Despite silver bullion being highly liquefiable, purchasing physical silver is usually seen as an investment for the long term. Several investors, who are not willing to take and store huge quantities of silver and who are aware of the metal’s volatility, would prefer to make speculations on price movements happening in the short term.
The most convenient and common method to achieve this is via speculating with ETFs. These ETF funds can be managed like stock-trading, but they track silver’s price with considerable reliability. ETFs are not redeemable in silver, unless they are bought in huge quantities, and they lose their relative value to the physical metal over time. However, for shorter duration speculations, ETFs are probably the best bets for the investor.
PHYSICAL silver Over ETFs – Mike Maloney
Purchase Silver Mining Stocks.
Purchasing mining company stocks is a more convenient way of speculating silver’s price; many savvy investors prefer this method. However, there are several risks attached to purchasing mining stocks. Mining is an expensive and inherently risky enterprise, as individual mining firms are subjected to several factors that are independent of the metal’s price.
Nevertheless, silver mining firm stocks react favorably when there is an increase in silver prices. Courtesy of some research, one can identify established and reputed mining companies with an investor-friendly market position.
Silver Futures
Silver futures are not meant for amateur or first-time traders. The folks who get involved with silver futures are the ones who have some expert and deep understanding of the market, especially the silver trading industry.
The expiration period for futures is very short, usually a month. The reason why advanced traders are more suited for silver futures is because after a month or at the time of the contract expiration, the investor will lose possession of his futures, irrespective of whether he is at a loss or gain.
Expert traders would be able to handle this quite well and would be able to identify silver futures that would most likely reap benefits. Silver future is a very short-term investment and is not recommended for investors with long-term objectives.