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Factors To Consider Before Investing In Silver Coins

George Sterling | Friday, December 14th, 2012

After gold prices skyrocketed, many people turned towards other precious metals for investing purposes. The most common types of precious metals that people invest in include platinum, palladium and silver. Silver is the top choice amongst investors after gold.

You can invest in silver through buying silver coins and bars, along with silver mining companies’ stocks, silver ETFs and shares in silver companies. Majority of the people seek to purchase silver in physical form. However, before you go ahead with your investment, there are a few things that you should keep in mind.

  • Silver coins can be purchased through physical retailers as well as online retailers. The number of online retailers selling silver coins has increased due to the rising demand of the metal as a viable investment choice and therefore, it is always important to buy from a trusted source.
  • Payment for silver coins can be done through credit and debit cards. Some sites also offer the choice of paying through PayPal.
  • Buying silver in physical form online is an easy way to buy the metal but always make sure that you are buying from a reputed site. This is because you will be required to enter your credit card or debit card details and you don’t want your personal details to end up with an untrusted source.
  • Apart from buying silver in physical form, you can also buy silver ETFs or stocks of silver mining companies. It is always better to diversify your portfolio in order to maximize returns and spread risk. By buying silver in physical form, your gains will be limited and risk will be higher.
  • If you are a newbie to investment, maintain a good distance from silver ETFs. ETFs stands for exchange traded funds. It is not only silver ETFs that you should stay away from but you should avoid investing in ETFs in general, irrespective of the type of metal’s ETFs you are considering to buy because they are very risky
  • The cost associated with buying silver in physical form is higher because you will have to pay for storage and transaction fees. Physical silver such as silver bars and coins are mostly stored in financial institutions such as banks but for the bank to store your silver, you will have to pay a fee. There are no storage fees if you buy silver in paper form  (stocks, shares or ETFs)
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