Silver as an investment is one of the precious metals that are available to almost every investor. One of the key attractions for investing in silver is that the price of silver can be affected by factors outside of inflation. Though silver will follow the price of gold, silver can also be active when gold is not. This is because silver is used in production across many different industries. This allows investing in silver to become a truly versatile investment.
Investing in Silver – Industry Indicators:
There are many industries that utilize the physical and chemical properties of silver. Some of these industries are traditional while others are emerging. Technology industries utilize the conductive properties of silver for specialized batteries, and as contact points for electrical connections. The industries that make plastics use a great amount of silver each year as an ingredient in chemicals such as ethylene oxide and formaldehyde. Both of these chemicals are an essential part of making plastics. Even the medical industry has found uses for silver. Medical treatments such as silver sulfadiazine are utilized on a world-wide bases to treat burns. Emerging technologies such as solar power, and modern warfare look to silver to provide a cornerstone within development and production.
Trends within any of these industries can become an indicator for those investing in silver. The price of silver can be driven by demand, like many other commodities. Emerging technologies such as solar power utilize silver in switches, and circuit breakers because of its durability when exposed to high temperatures. Silver is also a malleable metal which means that it can be manufactured into many different shapes and customized to fit most projects.
Investing in Silver – Social Trends:
Besides the obvious use of silver in making jewelry, silver has been made itself at home within social trends. Environmental movements such as green living have and will continue to play an important role in these kinds of industries. Solar energy is one such industry that will likely require an increasing amount of silver as the emergent technology develops into a larger presence. This is because both the environmental movements and the government have realized the benefits of solar power. This means that consumers will benefit as this emergent industry continues to grow. Development of this industry should translate into market indicators for those who are investing in silver.
Investing in Silver – The Basics:
Learning how to invest in silver is a popular question, especially since the investment side of silver and other precious metals become even hotter as investments. Following the trend is one reason to learn how to invest in silver, but that is not the only reason. One of the primary reason to invest in silver is simply that the lower price makes this an affordable investment for everyone. Another reason for investing in silver is that off all the precious metals, silver is perhaps the most widely utilized precious metal.
Silver can be purchased in many forms. Silver may be best utilized by investors in either stocks or as bullion. Silver jewelry is usually already market up past the point of the daily spot price of silver and usually does not make a good investment. Silver bullion can be purchased as ingots, coins, or blanks. Rare coins are also a silver investment that should be avoided. The rare coin is not considered the same as buying silver coin bullion. The price associated with a rare coin is based on the value of the coin, not on the weight of the silver in the coin. This means that the intrinsic value of a rare coin is subjective and priced above the weight value of the silver. To make a profit, the price of silver must rise a great deal above the current silver prices. Rare items should best be left to specialist investors.
The spot price of silver is posted daily by the New York mercantile exchange. It is the closing price of silver from one day to the next. Another key term that investors should become familiar with is the premium price of silver. This is usually a percentage that shows investors what the mark up on silver would be. To find the premium price of silver use this formula:
Quoted price of silver – daily spot price of silver. Divide the answer by the daily spot price of silver. Multiply the answer by 100 to give you a percentage. The answer is the percentage that the silver has been marked up. This is an important number because it reflects the range that silver would need to rise in price before the investment would break even. Every investor should be concerned about the return on that investment as this is part of learning how to invest in silver. This is also a reason why investments should follow a strategy that is outlined by evaluating risk and performance.
Learning how to invest in silver is a perfect opportunity for the new investor because the trends within the silver investment realm are easy to learn and the principles can be applied to other investment opportunities. Since silver comes in many different forms, there is something there for every investor. Silver is also a good investment because of the demand that is placed on mining and production of silver from both traditional and emerging industries. The properties that endear silver to industry use means that the opportunities that silver presents as an investment will continue even if inflation subsides.