Silver buying tips for investors

In times of economic turbulence, investors have turned time and again to the precious metals market to find an investment that will protect their wealth through the most difficult of times. That’s not to say that gold and, in particular silver, are entirely recession proof – the precious metal markets experience peaks and troughs just like any other form of investment.

However, when investors are in for the long haul, prices of precious metals have been seen to enjoy long-term growth, and in a world where nothing is ever 100 percent certain, they certainly represent the next best thing.

 

A look at the silver market

When the global economy plummeted ten years ago, the price of silver went into a period of sustained growth. As we have enjoyed the green shoots of recovery, so the value of silver has tailed off a little – does this mean it is likely to plummet and everyone should be selling? That seems very unlikely.

In fact, most analysts draw the opposite conclusion and feel this is the perfect moment to invest in silver and other forms precious metals. Industrial demand is on the rise, particularly in the electronics industry and renewable energy sectors, but the recent blip in value has meant the mining companies have felt the pinch, so supply is actually slightly lower than it was five years ago.

Increased demand coupled with reduced supply is an equation that even the most amateur of investor can solve and this could indeed be the right time to buy.

 

How to buy silver

In a world where we are accustomed to everything being virtual – contactless payment has largely eliminated the need for cash and phone apps will soon make even debit and credit cards obsolete, there is something comforting about silver in its very tangibility.

The easiest way to invest in any precious metal is the time-honored method that has been around for generations: to go out, buy it and keep it somewhere safe. The exact form it takes is down to personal choice. You might decide to invest in silver dollars, which have the added benefit of being collectible, and therefore have a value that goes beyond being a function of their weight and the current commodity price. Alternatively, you can buy silver bars here in a variety of weights, from one ounce right up to 70 pounds.

 

Alternative ways of investing

While most people feel the tangible nature of silver is one of its primary benefits, the idea of physically taking possession of precious metal does not appeal to everyone. After all, you need to look after it, keep it safe and then decide where to take it in the event that you choose to sell.

A silver ETF provides another way to get a piece of the action without needing to invest in a safe. Essentially, a silver ETF is a mutual investment fund that tracks with the price of silver. It provides the benefit of the precious metal’s market resilience but even more flexibility, as it is possible to buy and sell your investment at the click of a mouse.

 

How to Smartly Diversify Your Investment Portfolio

Diversification is possibly the most cried about word in the investment world. All investors know they need to diversify their portfolios. The key questions here is “how exactly”? Though you may hear investment diversification being talked about a lot, there is no surefire formula to diversify any individual portfolio. But there is one core principle that applies to all efforts: don’t lost money.

Obviously, you would want to diversify your portfolio in a manner that doesn’t result damaging your principal investments. Financial gurus like Tony Robbins recommend following the asymmetric reward principle. That is to say, for the least risk, you should be able to gain the most reward. For example, if you risk a dollar, the potential reward for that risk should be five dollars.

Here are some other useful tips that will help you diversify your investment portfolio in the most efficient manner possible:

Create Your Own Mutual Funds

Mutual funds are financial assets that are made up of many different types of stock. Financiers advise individual investors to get their portfolios to someone resemble a mutual fund. That is to say, don’t focus your stock holdings on one sector. Spread out the wealth. If you have penny stocks in tech, for example, don’t be happy just yet. Purchase stocks in other sectors as well.

Be careful when you go about putting your eggs in many different baskets. Don’t choose a sector that you have no idea about. Don’t spread the wealth too much, because that would make it more difficult to look after your investments.

Mix Up with Bonds and Index Funds

Diversification should be a long-term solution. The regular trading stock are not great for fixed-income returns. Therefore, it’s highly recommended to include bonds and index funds in your investment mix. These types of investments are much less vulnerable to market volatility than regular stocks.

Buy Real Estate

If you have enough wealth, don’t keep it all in cash. Diversification doesn’t refer to spreading the wealth within an asset class. When you buy bonds and real estate, you are diversifying between different asset classes as well. Real estate or property investments are an excellent solution for long-term diversification. The 2008 recession exposed how vulnerable this asset class can be for devaluation. But think about what has happened since then. Home prices are back up. Property is always valuable no matter where the market goes. As a result, it is one of the best classes of investments that should be included in your portfolio.

Diversify Globally

If you want to limit your risk stemming from a single market, diversify into foreign stock markets as well. When the U.S. market takes a hit, values in a foreign market may increase. For the best results, have assets in different countries as well as currencies. When Brexit happened, the pound took a dramatic fall. But the damage was contained to that one currency and didn’t affect the dollar. When you keep all your assets in a single currency, there’s an inherent risk associated with it like that, but not when you own investments in multiple currencies.

There is no best way to diversify. If you are unsure of what to do, seek help from a professional financial advisor. Keep educating yourself to make the best decisions.