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Intro: Currently the world is seeing a rise in precious metal prices that rivals any past increases in the dollar value of gold and silver. The fear of a weak dollar and the unpredictable economy has driven more investors to add silver and gold to their portfolios. Many are investing in precious metals on paper, but a significant number of advisors recommend holding physical metal, rather than investing solely in futures. Will the prices continue to rise? No one really knows, but holding precious metals as a hedge against inflation or total monetary meltdown gives investors a sense of security that other investments don’t.
Step 1: Learn, learn, learn. Read everything you can about silver and gold, their history, investment advice and current value. With the price of gold making it beyond many investors’ reach, increasing numbers are turning to silver as an alternate metal to invest in. Silver experts are predicting a continued rise in the dollar value of the metal, so even though the price is at historic highs, it may still make an excellent short-term investment.
Step 2: Decide what your motives are for investing in precious metals. Are you looking for short-term gains, or are you in for the long-term security of holding precious metals? Short-term investors buy and sell as prices rise and fall while long-term investors hold their assets for the future.
Step 3: Determine which metal you will invest in. Because of the high price of gold, silver may be a better initial investment for beginners. The price of silver tends to be more volatile than gold, but the two generally rise and fall together.
Step 4: Create a secure place to store the metals. A safe that is well hidden in the home works well. Be sure the safe is fireproof and the secret spot is secure. Many people keep their metals in several places in the home, rather than in one safe.
Step 5: Decide on how much money you are willing to invest in precious metals. Use a percentage of your income, or take a portion of an income tax refund for investment. Stay within the budget you establish.
Step 6: Determine what form of precious metals you will purchase. Having a variety of forms is a prudent step. Choose from bullion coins, like the American Silver Eagles or the Canadian Gold Maple Leaf coins, bullion bars or junk coins. Junk coins are old, pre-1965, silver currency that has no inherent value beyond its silver content. These coins are 90 percent silver and are becoming more and more difficult to find as investors are stocking up. Buy only from a reputable dealer.
Tips: Remember that although the dollar value of silver and gold rises and falls, the inherent value remains. These are precious metals that have been valued by humans for thousands of years. This is different than investing in collectables that may quickly lose all value.
Warning: Stay within your budget and define your investing goals to avoid rash buying or selling. Watch out for fake silver coins increasingly being imported from overseas. They look like historic American coins but have no silver content.
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