Silver has become a very popular investment choice, but how can you buy this precious metal or put your capital to work? In addition to the actual bullion you also have a number of other options as well. There are mutual funds that specialize in this type of bullion and others. This pick may allow you to get a number of holdings or vehicle types with a single expense. There are also retirement accounts that allow you to buy and hold this mineral.
Stocks in mining companies and businesses that explore and develop potential reserves can be a convenient way to make an investment. There is no bullion to store and no need to be concerned about theft. The shares that you own reflect the underlying company though, and if you are not careful then you could choose what you think is a winner just to end up losing everything. If stocks in this sector are your final decision then make sure that you research the organization thoroughly before you decide, so that you are aware of all the risks and you have all of the data and information you need to make this choice.
The most popular way to buy this precious metal is to find the actual ore and then store it. These products can be found in many different forms and sizes, so there are options that can fit within almost any budget and preferences. One of the types that are chosen frequently is coins, and these hold a fascination for many people. The cost for these silver items is usually more than a comparable weight using another form because coins have a premium attached that bars do not.
Bars of bullion are typically the best option for investors. These are usually the least expensive, they are in a shape and size that is easy to store and that requires little space, and they are generally very liquid and can be sold very quickly.
You will also find this precious metal in dust, ingots, jewelry, and a number of other types. The one that you choose will depend on all of the important factors and criteria in your case. Ingots and nuggets may be difficult to value and powder or dust may be hard to test for quality with any uniform standards and reliable results. That may make these products unacceptable as an investment for many individuals.
One of the first things that anyone ever learns about the stock market is to “buy low and sell high”. It is one of the cornerstones of capitalism but more than anywhere else, it is a way of doing business that has applied to the stock market most of all. We all have this image of stock traders analyzing company performance, studying markets and understanding geo-political issues at home and abroad so that they can pick winners and weed out losers among the listed companies on the stock exchanges.
But something has happened along the way and many people believe that these changes to the market have been a big culprit in the situation the world currently finds itself in financially. Wall Street has created derivatives, short selling and a wide range of other financial instruments over the last half a century and these things have muddied the waters.
Anyone with an interest in shares has at one time or another been online, checking out the latest news about their favorite company and noticed a company’s share that was just too high. For one reason or another, the market had worked to increase the value of that share and in your mind it was due for a sudden, hard return to earth.
What if you could sell a certain number of those shares right now, at that price without having to actually own any shares at the moment? And what if you had a period of time where you could wait until the share fell to a price where you could buy enough to cover what you’ve sold and all of the profit between the sale and the purchase belongs to you. Welcome to the world of short selling where the objective is to sell high before you own and then buy low to cover your position and make a tidy profit along the way.
This type of share trading came under intense scrutiny during the August and September 2008 Global Financial Crisis and the subsequent market meltdowns. When the situation start to become clear that the world’s largest banks had been caught with their pants down, short sellers started diving into the market waiting for the panic selling. They just drove more and more fear into the market.
It became such a problem that the Australian Securities and Investments Commission (ASIC) took the unprecedented step of actually placing a halt on all short selling on the Australian Exchange. Subsequent reports that came out about what had happened described how greed and opportunism had overtaken ethics and the situation blew up.
Internationally work has been done over the last three to four years to put more tight rules around short selling and covering positions. The real problem is that pension funds and retirement plans must invest their members’ money and the stock market is an obvious choice, but when there are people “playing the game” the wrong way, actively trying to drive down value in companies, it creates a systemic problem where people are rewarded when failure occurs rather than when there is success and that has the potential to destabilize the entire market over the long haul.