10 Tips for Silver Bullion Investors

The silver market can seem like a daunting place for newcomers, with prices that can fluctuate dramatically on a daily basis, and the added confusion of charges such as VAT. For first time silver bullion investors, it is essential to read as much as possible about the market before stepping into this fast paced environment. Although it is important to diligent, though, there is no need for hesitation. This market is all about liquidity and knowing when to act.

Silver bullion

Expect Fluctuations

With the silver bullion market being notoriously volatile, you should expect prices to fluctuate much more than you would with gold. Both before and after buying, it is necessary to keep a close eye on the market and check the prices multiple times daily so that you are fully aware of when you should be buying and when you should be selling. In order to make the best of the silver market, investors need to act confidently, without hesitation, once they see a price that is favourable to them.

Consider the Trends

If you are new to the silver bullion market, you can learn about trends by studying the historical prices and how they change. This will show you how quickly the silver price can rise and fall, and prepare you for the volatility that you can expect once you enter the market. Experienced investors should also study these trends, no matter how much they already know about the market. This is important in order to ensure that you are as knowledgeable as possible and can make measured, informed decisions.

Get the Ratio Right

It is advisable to hold silver in a bullion portfolio, in a gold to silver ratio of 2:1. Silver is a great way to add to an existing gold bullion collection and allows you to benefit from the contrasting properties of gold and silver. The relative stability of gold in comparison to the silver price means that you can balance low risk investments with slightly more risky ventures in the silver market. Before you begin buying and selling silver, it is worth considering purchasing gold bullion and building up a full, balanced portfolio.

Store Securely

Even though silver is worth less than gold, it is still important to store it securely, especially if you plan on storing it at home. It can be tempting to neglect this aspect of the bullion process, but it is vital to keep your silver safe once you have bought it, otherwise your investment could quite lierally go out the window. If you do not have a secure method of storing your silver, you may wish to consider different storage options, including purchasing a safe or using a bank safety deposit box.

Remember to Add VAT

Unfortunately, in the UK silver is not exempt from VAT, so this should always be considered during the buying process. Most sites include VAT in their advertised silver prices, so you won’t have any nasty surprises when you get to the checkout. However, this is not always the case, so if you spot a price that seems a lot cheaper than others, you should always check if VAT is included. This goes along with the idea that, if a price seems too good to be true, it usually is.

Silver bars

Check the Purity

When it comes to buying silver bullion, the purity grade of products can be lower than it would be for gold bullion. Although this is not necessarily a problem, as it is to be expected in the silver market, it is still important to consider this when buying bullion. If you are buying silver that has a lower fineness, you will not be able to sell it on for as much and may therefore lose out when it comes to profit. Always calculate how much pure silver you are getting for your money, to ensure that you get the best deal possible.

Take Advantage of Liquidity

The continuously fluctuating price of silver, along with its lower value, makes it much easier to sell on than gold. Silver changes hands much more frequently than gold, and investors are much less likely to hold onto it for long periods of time. Take advantage of this by becoming accustomed to selling whenever the price is favourable to you, and then buying again when prices drop. The key to success in the silver bullion market is decisiveness, so don’t hesitate or you may lose out.

Compare Prices

As well as watching the changing silver prices, investors should also watch the prices offered by different bullion suppliers. Some may offer a slightly better price than others, which can really make a difference when you come to sell – especially if you intend to buy and sell multiple times. Don’t buy bullion on an impulse; it is vital to research the market first and find out where you can find the best possible prices. Only then can you maximise your returns.

Beware of Shipping Charges

Many bullion suppliers add steep shipping charges onto orders, which reduces the value of the investment and ultimately cuts into your returns. Be sure to shop around to find a supplier that doesn’t add these charges, so that you can be certain that you’re getting the best deal overall. Additional costs like these can eat up your investment, so make sure you consider this before purchasing and always do your research.

Know How to Sell

Unlike the gold market, the silver market moves fast and involves a great deal more selling than gold. In order to take advantage of a good price when it comes around, make sure you know how the selling process works and that you’re confident you know how to proceed with it. The selling phase of the process is just as important of the buying phase, so it’s vital that you collect as much information as you can and shop around for the best possible price.