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The rules for silver investment:

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Silver is one of the most viable investment options in the current market. In terms of silver production, India is ranked in the 12th in the world. In the past year, India contributed 16.9 million ounces of silver. It is also one of the largest producers of gold and silver in the world. Market experts have rated silver as one of the investable commodities in the current market. However, before investing your hard-earned money in silver it is essential to go through the rules for silver investment.

  • A viable investment option when everything else fails: Many experts consider silver as the last resort when every other investable commodity fails. In case of economic failure, paper currency would become worthless which would mean that silver would become the primary currency. (Gold cannot become the primary currency in this case because its price will be unaffordable for daily usage.) Hence to prepare for such cases, the investor can store some amount of silver.  
  • Buy small amounts of silver in the beginning: One of the most common mistakes made by investors when investing money in silver is that they buy too much of it too early. In the beginning it is advised to buy bullions bars or coins in small sizes. Also, commemorative coins, jewellery and decorative items must be avoided as investment commodities in the beginning as these have large premiums and do not have high resale value.  
  • Ensure that you purchase stocks of mining companies in the long run: Once you have bought silver in the physical form, you can then invest in the stocks of mining companies. Volatality in stocks directly affects the price of silver which results in the rate of return being much higher than the rate of the precious metal itself.  
  • Making dollar cost purchases: If as an investor you make same dollar cost purchases multiple times, the amount of silver that you buy is more when the price are low and more when the prices are high. Making dollar cost purchases helps you in being disciplined when making purchases and instilling the philosophy of investment. Dollar cost purchases allow you to suffer the blow of movement of prices against you as it becomes an opportunity to invest more money in the commodity rather than it being seen as a loss.  
  • Always buy silver from a well reputed dealer: Stock markets experts always advise the investor to buy silver from a well reputed dealer. Even though the fee charged by the dealer will be an additional charge, he or she will ensure timely execution of trade prices which will result in fair prices being paid. This will compensate the high price of the dealer. Hence, dealers with low prices should not always be given preference by the investors.  
  • Keep the silver safe: As the amount of silver that is bought by the investor increases, he or she is advised to keep most of it in a safe place. Alternatively, the investor can also store the silver in a storage facility or open an account with the brokerage warehouse. Doing this will ensure that the holdings are kept separately, and they can be inspected as per the wish of the investor.  
  • The amount of silver to be bought depends on the investor’s individual goals and tolerance: The amount of silver that is to be bought by the investor should depend on the extent of the investor’s financial goals and the risk tolerance capacity he or she has.
  • Research is essential before investing: Before you invest your hard-earned money in silver, it is essential that do your research. Research will greatly increase the chances of obtaining success on the investment.  
  • Understand that collecting silver related items is not an investment: Owning silver made items such as coins, jewellery etc. cannot be considered investments because they do not always generate high returns. Unless the investor has a knack of buying and selling these collectibles, it is hard for the investor to get any sort of return on them.  
  • The upper limit of investment in silver should not be more than 10% of the total investment value: Another rule when investing money in silver is that the maximum amount of money that should be invested in the precious metal should not be more than 10% of the total investment value. It is essential to have a diverse portfolio as an investor.  

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