How to Invest in Silver

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Like any investments such as investment in gold, silver is capable to give lots of investment opportunities and handsome returns for the long run. Silver also a perfect investment to diversify the portfolio as well as a perfect hedge against inflation and recession.

Why should you invest in silver

The major reason to invest in silver is, it has high demand in the market especially from various industries. As known as ‘common man’s gold’, acquisition of silver is much more easy than gold. Previously silver was the less preferred metal as compared with gold. Nowadays silver has become trendier than gold in the jewelry market!

In India, price of the silver in the year of 2007 (31-March) was Rs, 19,520 per kg and has increased to Rs. 57,000 per kg in the year of 2022 (08-July) !

Silver also considering as a precious metal like gold because, silver is a rare, valuable and noble metal. Also, silver as an investment offers advantages that are similar to those of gold.. Considering these characteristics, adding silver to the investment portfolio is an intelligent investment option.

Timing of the market for silver can be predicted easily. During the festival or wedding season would bring the prices of both silver and gold up to a comfortable level to sell.

So, how to invest in Silver??

There are two methods are available to invest in Silver. Investors can buy silver either in Physical form and/or in Paper form (e-Silver), depends on the requirements and facilities to store.

Physical forms of the silver required secure storage space such as bank locker etc… However, any investments in the form of e-silver can be stored in the NSEL or National Spot Exchange account. This will take away the worry of investors to identify the space to store.

Silver has high liquidity. Thus, silver can convert to money at any time in case of any personal emergency.

1. Coins and Bullion

Buying coins and silver bullion is a best option to invest in silver in the physical form. Investors can easily buy these from the jewelries and/or from banks. However, buying from banks are little ore expensive.

Silver bullion refer to silver, which is around 99.5% pure. Bullion is traded in the commodities market as well. Silver bullion is also available in the form of coins, but they generally are more expensive than silver bullion bars.

If you planning to accumulate physical silver as an investment, it is recommended to go for coins. Buying silver in the form of jewelry or ornaments are far more expensive than buying coins. While buying ornaments or jewelry, one has to pay the making charge of 10 per cent or more. But, while selling, the melting charges will be reduced and will not get the making charges back. Considering these facts, if you wish to invest in silver for long term, prefer buying silver coins and bullion.

Ensure you are tracking the silver price in MCX before selling physical silver to the market to get maximum returns.

2. Silver ETF (Exchange Traded Funds)

In India, currently no direct mutual funds investing to silver. However, few fund houses such asICICI Prudential AMC, Nippon India AMC, and Aditya Birla Sun Life AMC have silver ETF’s (Exchange Traded Funds) offering investors to accumulate silver in the paperless or e-digital format. These are actually fund of funds, investing to the units of silver mutual funds in other countries like US…

3. Silver Commodity Futures

Silver futures are an easy way to wager on the rising or falling price of silver without any of the hassles of owning physical silver. It will be in the format of e-silver, but have option to take physical delivery of the silver if required. In India, MCX and NCDEX exchanges offering investors an option to invest in silver through commodity futures.

Please remember, this form of investments relies heavily on market movements. You can sell your contracts at a later date and get a higher profit.

4. Digital silver from NSEL

National Spot Exchange offer investors to buy digital silver or e-silver by put their money in smaller chunks to the silver units and hold the purchase in a Demat form. Investors need to to open up a depository accounts with NSEL to start the investment process. NSEL also has an option to deliver your silver investments in the form of physical silver.

Above are the available options to invest in gold. Each country has several other products to invest and investors need to find those options. Over the above options, there are private companies such as Milestone Capitals offering various silver investment schemes that investors can check as well.

Few important points about silver

  • For long run, silver has the capacity to outperform over gold
  • Financial advisors suggest 10-15% investments in precious metals to diversify the portfolio.
  • Silver ornaments as a nice alternative to gold since people get boundless beauty for the reasonable cost.
  • Nowadays, people irrespective of the class and profession loves to wear silver ornaments.
  • Silver ornaments are less costly compare with gold.
  • Wearing silver ornaments are a part of customs and traditions in India.
  • Compare with gold, silver is a hard metal. Daily usage of silver ornaments thus reduce the possibility of damage
  • Silver and stones are very good combination. Silver rings with diamonds, rubies, emeralds, and sapphires are trending combination and looks elegant.
  • Remember, commodity investment is risky. Thus ensure you have enough knowledge and awareness about the associated risks when dealing with commodities.
  • There is a relation between gold and silver. When gold prices are up, silver prices also go up and vice versa.
  • Systematic investing style is better to accumulate silver with investment purpose.
  • Silver has great industrial use. Thus, industrial demand of silver is an important factor in the silver price up and downs.

To the readers: Please let me know once you feel anything I have missed above, in the form of comment below.