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How to trade silver?

ForexZig.com February 20, 2013
silver_investment

Silver investment

If you choose silver for investment, it is good to know all the ways of do this:

-> Trading in the spot market against other major currencies, like the forex trading.

-> Trading of silver with futures contracts.

-> The Contract for Difference (CFD) on silver futures contract.

These trading options are suitable for speculative purposes, as they are built on a margin basis.

Other options are:

-> Trading of silver through exchange-traded funds (ETF).

-> Investing in shares of companies engaged in the extraction of silver.

These options are suitable for both speculation and investment in a long-time perspective.

Another way is to invest in physical and real possessed silver. This option is most appropriate for investors with long-term oriented goals and for those who have pessimistic views about the future development of the world economy.

However this kind of investment has many disadvantages as:

-> Expense of storage;

-> Large spread;

-> Low liquidity.

If you intend to invest in physical silver, you should consider the following things:

-> Do not buy metal from many different places;

-> The best option to invest in physical silver is to buy investment coins;

investment_coins

Silver investment coins

Investing in antique and rare silver coins requires numismatic and specific knowledge and is not recommended. The price of these coins largely depends on the value and rarity of them, which is very difficult to determine, unless you are a specialist in the field.

Do not buy silver jewelry for investment purposes. They contain high levels of impurities and are overvalued as a result of jewelry processing.

Most people consider investing in precious metals for low-risk and safe, but this is misleading, since it has its pitfalls as any other investment.

Here are some of the most common mistakes:

-> Lack of investment plan – it is necessary to determine at what price to enter the market, with what amount and when to leave. These decisions should be made after studying and understanding the trends and characteristics of the market, not on the base of spontaneous decisions or rumors;

-> Investing without prior consultation with a trusted expert in the field – expertise is crucial for people who have no experience;

-> Do not put “all your eggs in one basket.” It is advisable not to put all your money in the idea of profiting from any appreciation in the silver price.

Thus it is easier to bear any shocks on the market that are likely to happen because of the highly liquid nature of the metal.

Historically, it is proven that during tough economic times, precious metals rise in value at times. The world today that is shaken by no passing global financial crisis and by the devaluation of paper money, leads to unification and opens doors to rare investment opportunities. For example, if we look silver in various forms of investment, precisely in these times its price could reach unprecedented heights and bring their investors unprecedented returns.

Related articles -> Silver – the undervalued precious metal; Is silver beneficial?

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