Getting Started With Silver Investing

If you want to invest some money, but are not comfortable with the stock markets at the moment, you can consider making investments in some precious metals like silver. As the price ratio for silver to gold is near historic low at this moment, this is really a great time to make decision on investments in the silver.

Basically there are 3 methods to make investments in the silver:

Buying the bullion, investing in securities and purchasing the jewelery.

Bullion

Just like gold, silver is also available to you in 99.9 % purity in the form of bars and coins. Silver coins are issued by the US Government which have face value ( like $10 or $20) to enable it to be used as currency even if prices of silver nosedive. Silver bullion is available in the form of solid bars with a weight range from ounce to one hundred ounces. Bad news in making investment in them is that these bars could get really heavy if huge sums of money is invested in them, but a good thing about this is that large weight makes them cumbersome to steal!

Securities

If you plan to make large investments, then security backed by silver would be the right way to go. Many brokerages now offer some mutual funds which are usually tied to the silver value by making investment in the bullion, shares of silver mining industry or silver futures.

"World Precious Mineral Fund" is a fine example of silver backed mutual fund.

Yet another good investment option is ETF (Exchange Traded Fund), a kind of security which was invented in the year 2002. In this you make direct investments in silver bullion quantity which is then stored at a secure and safe place and is insured by the fund. An example of silver ETF is "Silver Trust Fund" from ishares.

Jewelry

Making investments in the silver jewelry has an additional benefit that you get to wear the piece in which you are investing.

If you make investments in some unique or antique silver jewelry piece, then you are adding some value to the artistry and craftsmanship. This may result in the price of antique increasing more than the value of silver and is thus a safe investment for you even in the case of drop in the price of silver.

Michael has been writing articles online for 10 years. Check out his latest website Exilim Digital Cameras which help people find more about Casio camera battery.

Silver Investing - How To Lower Your Risk

On November 10th of this year the margin requirement for those who speculate in silver futures was raised. The subsequent drop in the price of silver was attributed to the fact that many speculators had to liquidate a portion of their holdings to comply with the new margin requirements. Two days later, on November 12th, the central bank of China raised interest rates a half point. The price of silver swooned, justifying the increased margin requirements.

It's no secret to the relatively tiny silver investing community that the price of silver has been more volatile than the price of gold in recent months. On a percentage basis, it's not unusual for the daily price movement of silver to be two to three times as much as that of gold. That volatility increases the potential for gain, and the risk of loss, in the short term.

It's been many years since, as a novice, I lost my entire stake in the futures market. As I remember, a contract cost one percent of the value of silver represented by the contract. Now that's leverage. If you are trading on margin, the leverage is multiplied. On a day when the price of silver moves three to four percent, the speculator stands to make, or lose, 300% - 400% of the money required to buy the contract.

I like the leverage of futures contracts; but recent developments, first in the options market, and secondly, through specialized ETFs, provide enough leverage for me. I cannot watch my investments all day, or even check them hourly. However, my current silver investing spans a fairly broad spectrum, including shares of silver mining companies, an ETF, a leveraged ETF, and stock options on two of the three, and LEAPS on the other.

On November 12th, when the price of silver dropped precipitously, my account value took a multi-thousand dollar hit. I didn't lose any sleep over the ETFs, the mining stocks, or the LEAPS. I knew they'd come back in plenty of time. But I got a wakeup call with the stock options. Fortunately I had employed contingent trailing stops just the day before.

Options are a means of leveraging my investment choices, and I have traded stock options for years. But I was hesitant to buy options on silver mining companies and silver ETFs because of the very high premiums I had to pay. The premium is affected primarily by two factors; time until expiration, and volatility. If I pay a high premium, price of the underlying asset, whether stock or ETF, must move a good amount in the right direction just to break even.

If silver suffers through a multi-month pullback before returning to the price it was when I bought the options. I could lose a significant portion of my investment. That is because the time value of the option I bought has decreased with the passage of time. And no one can recover time lost. If, during the pullback and recovery, volatility decreases, option traders stand to lose even more. I am even rethinking my 2012 LEAPS. The 2013 I will let ride.

To reduce risk, stay away from options or short-term strategies. In the long run, I believe silver is as safe as gold, and will continue to outperform gold for reasons mentioned in other articles.

Learn how to protect yourself against the current (and impending) economic disaster with silver investing. For more information: http://www.esilverinvesting.com

Gold and Silver Investment Choices

Gold and other precious metals have been moving rapidly upward in the market, and investors wonder what investment vehicles are the best choices to capture that upward price appreciation in the precious metals market. Many wish to buy and hold the precious metals themselves, but there are a number of alternatives. Each of these different options has its own strengths and weaknesses. This discussion gives some basic information on the most common possibilities. Depending on what your goals are, you may choose to use one or more of the available options described below. I'm not an investment counselor, nor am I offering any investment advice, but here is a brief explanation and introduction to each of the best known opportunities for precious metals investment:

US and international gold bullion coins

The US and many other countries have made and are continuing to make gold bullion coins for sale. These are not coins which are rare and have numismatic value, but are coins made for investors interested in their bullion value. The American gold eagle coin is available and denominations of 1/10 ounce, one quarter ounce, one half ounce and 1 ounce. The great advantage of bullion coins is that they are easily available, liquid and portable. Most coin shops buy and sell them. If you plan to buy small amounts of gold, perhaps half an ounce a month for investment purposes, this is the kind of thing you may be interested in. The disadvantage is that they have a significant cost of getting in and out. It will cost about $25 plus the spot price for 1 ounce coin, and if you sell it you will receive a few dollars less than the spot price. The cost for a buy and sell combined is about $30. Foreign bullion coins, such as Canadian Maples or Krugerrands are slightly less liquid but may also have lower buy and sell costs. There are also one ounce silver bullion coins, which are available with a similar significant cost to buy and sell.

US 90% coin silver

Until 1964, all US coinage other than nickels and cents were made of 90% silver. These coins also have a bullion value based on their silver content. You can normally purchase from just a few to a big bucket full, and they are sold both by weight and by face dollar amount - by weight is probably the better deal as some old coins are worn. These coins are available at most coin shops. Like other bullion coins, there is a significant cost to buy and sell.

US Gold numismatic collector coins

Many investors are interested in gold collector coins. These are coins with a large numismatic (coin collector) value premium in addition to their bullion value. These coins will fluctuate somewhat with precious metal prices, but many times they also contain a significant price premium due to their desirability as collector coins. Sometimes the collector price appreciates significantly, but for those who really wish to invest in the appreciation of precious metal prices, these coins are probably not the best vehicle.

There are many more potential investment choices for gold and silver. Check out the Author?s website for further discussion. http://nevada-outback-gems.com/gold_invest/investing_gold_vehicles.htm

Chris?s Web page and BLOG on investing in the gold and the stock Market can be viewed here: http://nevada-outback-gems.com/gold_invest/Investing_Gold.htm Chris Ralph writes on small scale mining and prospecting for the ICMJ Mining Journal. He has a degree in Mining Engineering from the Mackay School of Mines in Reno, and has worked for precious metal mining companies conducting both surface and underground operations. After working in the mining industry, he has continued his interest in mining as an individual prospector. He can be reached at P.O. Box 3104 Reno, Nevada 89505. His information page on prospecting for gold can be viewed at: http://nevada-outback-gems.com/prospect/chris_prospect.htm

Silver Investing - What's Gold Got To Do With It?

Gold has had a ten-year bull run; one that has dwarfed the returns of the S&P 500, which is basically flat. Both gold and the S&P have had pull backs in the last ten years. The biggest pullback was suffered by the S&P, not gold. The consensus among mainstream market analysts seems to be that the S&P continue its climb, but that gold is in a bubble and subject to a deep correction.

But stocks are in a bubble, not gold. In the past 30 years, the S&P has risen about 1500%. But earnings have risen only about 300%. Earnings, or more correctly, expected earnings, is the fundamental basis for stock valuation. Putting a value on gold is much more difficult. But we can still look at the fundamentals of gold.

In 2010, for the first time ever, investor demand for gold surpassed jewelry demand. Industrial demand remains negligible. Why is investor demand up? Many reasons. One reason is that gold outperformed the equities markets in 2010. But there are many fundamental factors.

One is risk to the dollar, the world's reserve currency. If the dollar isn't safe, what other currency, what other country's bonds are safe? Many are turning to the safety they believe is inherent in gold.

Economic difficulties around the world and in the United States are growing. There are demonstrations and rioting over high unemployment and rising food costs in Middle Eastern countries. Unemployment remains high in the U.S., and there is no end in sight. Even Ben Bernanke warns that it could take five years or more for employment to return to health levels.

Government debt levels are high in most countries, and still growing. U.S. debt dwarfs that of any other country. No combination of countries can bail out the U.S., even if those countries weren't already struggling with their own sovereign debt issues. And the politicians continue to spend in most countries, increasing the debt even further.

How do governments spend money they do not have? Borrow-except the U.S. The U.S. cannot borrow enough at low rates, so the U.S. is lending to itself. In other words, the U.S. is monetizing its debt; printing money-which causes...

... inflation. Inflation is recognized in China. It is not yet recognized in the U.S. The National Inflation Association estimates that the real rate of inflation in the U.S. is at least 5%. With short-term U.S. treasuries selling for 2% - 3%, this means the real interest rate is experiencing a negative return.

Another fundamental; the threat of war. Think North Korea and Iran.

Doug Casey, a long-time, highly respected gold analyst, reports that gold production remains flat in spite of much higher prices and tightening supply.

Gold is not in a bubble. It has pulled back many times, and will again. But when the stock bubble bursts, and when the government debt bubble bursts, and when inflation sets in, gold will begin to form a price bubble.

What does all this have to do with silver investing? Silver is known as the poor man's gold. As the fundamentals for gold continue to drive prices higher, investors will be driven to silver. But the silver fundamentals are even stronger, especially supply/demand. Over half of the silver mined in 2010 was consumed by industrial demand. The physical supply of silver is very low.

Gold is getting a little attention; silver none. That is great for silver investing.

Learn how to protect yourself against the current (and impending) economic disaster with silver investing. For more information: http:www.esilverinvesting.com