Silver before you exchange your hard-earned green for some metals, it’s a good idea to nail down the basics.
How do you buy precious metals ?
Just as with gold, investing in silver can take numerous forms. Broadly speaking, silver investors have two options right from the outset: Invest in the physical metal or purchase a financial security that moves with the price of silver.
If it’s actual silver that an investor seeks, he or she can choose to buy coins, bars or rounds (privately minted coins).
Silver bars can be purchased from major banks, as well as bullion dealers.
Investing in precious metal coins presents another fork in the road for investors. On the one hand, there are collectible coins that often rise and fall in value based on factors having to do with the demand for that particular collectible. While those coins contain silver, the metal usually isn’t the primary driver of the price, according to Zeches, who cautions against buying collectible coins if you’re just interested in a silver investment. By contrast, bullion coins work much like silver bars, deriving their value solely from the amount of silver they contain.
Be careful with real silver.
While the price of metals is determined by trading on the commodities market, investors who buy physical precious metals still need to be careful about their investments, says Terry Hanlon, president of Dillon Gage Metals in Addison, Texas.
To start, Hanlon says that buyers interested in bullion coins can use a software tool on the U.S. Mint’s website to find recommended dealers. To avoid scams, it’s also a good idea to vet the dealer with some simple Internet research.
But even if you work with a trustworthy dealer, Hanlon says many novice silver investors fail to do the homework necessary to understand the minutiae of silver trading. The result is that they often buy at too high of a price to make any real money or rely too much on the dealer and make investments that aren’t right for them, he says.
If it’s not in your hands you don’t own it!