How to Invest to Buy Silver and Gold
A favorite sibling questioned me how to invest to buy silver the other day. Then she wanted to know should she buy gold or buy silver. She privileged the white metal because its price is much lower than that of the yellow stuff, and Carol is a bargain hunter. How to invest is the simple inquiry. Whether or not you should is the tough one. Here's my answer.
Every few years precious metals get hot and everyone is interested. Then there are periods of time when no one wants to buy silver or any precious metal. Before you invest in either get a handle on the past. As the year 2000 approached, you could buy gold for around $250 an ounce or buy silver for about $5 an ounce. Prices didn't change much for a few years. In late 2009 the white metal was over $17 and the yellow stuff was at an all-time high of over $1100.
As a rule of thumb, the ratio between them has historically been about 50 to 1 in terms of price, gold vs. silver. For example, $250 vs. $5. If you're talking $1100 vs. $17 then the price ratio of gold vs. silver zooms to 65 to 1, making the yellow precious metal moderately expense. Buy silver if you invest in either at these extravagant prices, Carol. It's the relative bargain.
Now that we've compared precious metals, the inquiry is how to invest. You can buy bars, coins, rounds, or bullion. But if you plot to play this precious metals game I recommend you do it on the computer through your money off broker.
You can buy shares in an exchange traded fund (an ETF) that trades like any other stock for a total fee of about $10. The stock symbol is SLV. This fund invests in silver bullion, the real stuff. The price of your shares will track the price of the white metal. You can buy any number of shares, and invest as much or as small as you want. You can buy or sell in seconds on any business day.
If you change your mind and choose to go with the yellow stuff, stock symbol GLD might be your investment of choice. But either way, don't just buy and ignore your investment. When the markets get volatile, things can change in a rush. That's the advantage when you invest in stocks online. You can follow your investment and sell quickly if the market goes against you.
Like I said, how to invest is the simple inquiry. Should you invest in precious metals is the tough one. But if you do you can avoid taking a major loss IF you invest in one of the above stocks; and you sell as soon as the tide goes against you. Dredge up, Sis, this is really just a game of speculation. Don't spend all of your money in one place. See you in Florida this winter.
Author: James Leitz
Article Source: EzineArticles.com
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