This guest post is written by Tony, who teaches investors how to invest and shares his market outlook. He’s one of my blogger friends.
Investing in silver is considered a good source of making money. Although silver has been lagging recently, it should not be overlooked (either long or short) because it still is in a 17 year, secular bull market.
Its transient passiveness may lead you astray. It is really a deserving and yielding place of trading your money. There are no guarantees that you can earn money through silver investing, but obviously, you can achieve success by taking a calculated amount of risk.
Before taking the bull by the horns, you must have a brief understanding of what you are doing. You should have theoretical knowledge about what kind of trend silver is in right now (super-long term, and medium term). This will allow you to gain the maximum profit out of this investment.
Below is some advice that will lend you a hand in this investment;
- Before investing your hard-earned money in silver, you are supposed to take an eagle’s eye view of the incumbent market. You should know the trends of the silver market, as it isn’t similar to stock market. The way silver market reacts towards different events is completely different from stock market. Silver, for some odd reason, works very well with technical analysis, while stock doesn’t always do so.
- Before investing in silver, you should have a sound knowledge of this trade. In other words, you should know the basics of this investment. Instead of experimenting, you should spend some time reading about successful silver investors (such as Jim Rogers) so that you may not get bluffed easily but silver’s high, temporary volatility.. Also, you meed learn how to buy or sell silver at right time. Read about the silver markets. That’s all I can say. If you simply dive into the silver markets, you will lose money. I guarantee you that.
- Regarding silver as an investment, you will find plenty of material online and blogs that are run by successful silver traders. However, keep in mind that a lot of “silver experts” have never had any real experience in trading silver. There’s a big difference in saying the right things, and doing the right things. Before you follow a blog about silver, check to see if the blogger behind the blog has actually been a successful silver investor. Learn as much as you can from these gurus and adopt an investment strategy of your own.
- There are some ways through which you can invest in silver. You can invest in silver bullion, silver coins, silver futures, silver ETF’s (exchange traded funds) etc. I prefer to invest in silver ETF, because those are in essence the same as trading one “share” of silver.
- As mentioned above, silver bullion are the most sure-fire silver investment. You must have detailed knowledge, tips and tricks on such an investment. While buying silver, you should look for those sellers who are ready to sell silver as near to its spot price. This doesn’t include the seller’s fee. A general rule of thumb is that greater the amount of silver you are purchasing, lesser would be the fee and vice versa.
- Prior to making any investment, you should make a thorough calculation of the amount of money you can invest in. At all times, you are required to keep a handsome amount of money in cash. This will allow you to cope with unexpected circumstances.
- To earn substantial money through silver investment, you have to be more of a trader than an investor. Silver often fluctuates more than 70% each year, so as you can see, not exactly suited for a buy and hold investor.
Disclaimer: I do not currently have any silver positions. However, I do believe silver is still in a secular bull market (17 year-long). In the short-medium term, there are often fluctuations of up to 70%. I’m waiting for silver to fall more, and then buy.
SB’s Thought: If you are buying silver for short-term, do remember that silver is not a liquid asset which can be sold and en-cashed easily. Even though on paper price of silver increases, it’s very tough to sell at that price, combined with fees and commissions you might end up losing money on silver investment.
There is a strong wave of thoughts around possible gold and silver bubble being expressed by investment advisers, you need to be cautious.