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Investing in silver can be done in various ways. The most common investment options include physical silver, silver ETFs, silver mine stocks, and silver futures or options. On this page, we will explain the various options and you will find out which one suits you best.
Investing in physical silver means that your investment tangibly is and you direct scrutiny hath about your property. You are not dependent on third parties or fund managers.
Physical silver maintains its value in times of inflation and economic unease, just like gold. After all, it is easy to make liquid. In addition, because you own the physical silver, it is well file into insolvencies whether digital risks like hacks, which gives you peace of mind.
At GoldRepublic, your silver becomes stored safely and securely in independent safes. This way, you don't have to store your silver at home and you don't have to worry about additional safety risks and insurances when storing it at home.
In addition, you will benefit from a buy-back guarantee so you can sell your silver at any time at the current silver price.
A silver ETF (Exchange Traded Fund) is a fund that tracks the price of silver without having to hold physical silver.
These ETFs are tradable on the stock exchange and are accessible to consumers via a broker. The additional costs are often relatively low and investors can start with a small amount. The advantage is that you can easily invest in silver without the storage or insurance worries of physical silver.
The disadvantage is that you do not physically own your silver investment. In addition, there is a counterparty risk. Because an ETF is completely within it financial system operates, the value may differ from the actual silver price or the functioning of the product may be affected by problems with banks, financial institutions or market players.
Many investors opt for gold or silver as insurance against such systemic risks; it is therefore important to realize that an ETF itself is part of the same system. This makes it wise to consciously consider this counterparty and systemic risk before you invest.
Silvermine stocks are stocks of companies that extract silver. For example, investors can invest indirectly in silver by benefiting from the operating results of silver mines. If the price of silver rises, silver mines' profits may increase relatively more, because their fixed operating costs remain the same. This could lead to larger price increases for silver mine stocks than for silver itself.
Silvermine stocks can offer higher returns than silver itself, but also have higher volatility and business risks.
With silver futures and options, investors can speculate on the future silver price. A silver future is a contract to get a fixed quantity silver on a agreed datum too purchase whether selling at a predetermined price.
Options give the right (without obligation) to buy or sell silver at a strike price, with the loss limited to the premium paid.
These instruments are primarily recommended to experienced investors because of their complexity, high volatility and risks.
Silver can be an interesting addition to an existing investment portfolio, which currently consists mainly of stocks and/or bonds, for example.
Silver prices generally do not have a stable, strong correlation with the price of stocks and bonds. As a result, it can be an interesting precious metal to diversify your portfolio.
The “ideal” percentage of your assets that you can invest in silver depends on the risk you are willing to take and your investment goals. For example, cautious investors can opt for 5% to 10%, while the more adventurous ones can hold more than 10%.
You can choose one type of silver investment, but you can also combine multiple options.
Of course, investors prefer to step in when the price is low and selling their position when the price is high. But because no one can predict the market flawlessly (and therefore not what the silver price will do), it is difficult to time buying and selling moments perfectly.
Silver is generally more volatile than gold, which means that the price can rise and fall faster and stronger. This involves more risk, but also more chances of higher returns.
In the longer term, investments usually have a greater chance of a higher return. With this in mind, investors often want to start investing in silver as early as possible and keep it for as long as possible. This increases the chance that you will get a good return on your silver investment.
Only invest in silver with money that you can afford to lose for now and be aware of the risks associated with investing in gold: you may lose (part of) your investment.
Because no one can predict the market, it may be wise to spread your investment over several months. This is called dollar cost averaging (DCA).
For example, you buy silver periodically for a fixed amount, for example every week, two weeks or month. Because you buy at different times, you spread the risk of price fluctuations and sometimes buy at a higher price and sometimes at a lower price. This helps to to reduce the average purchase amount and it to reduce the risk of incorrect timing.
Via GoldRepublic's Silver Savings Plan, you can automatically periodically silver purchase, starting from a €50 deposit or 1 gram of silver. The transaction costs with the savings plan are 50% lower than with a one-off purchase, which improves the return.
This approach makes it easier and more accessible to invest in silver in the long term without the stress of market timing.
There are several ways to invest in silver, from physical silver to listed products. This page explains what options are available and why physical silver is an attractive choice for many investors to protect value.
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