Thursday, October 16, 2008

How to Buy Silver

Many people ask how to buy silver. It might seem a simple question, but there are a number of things to look for when you want to buy silver and the most important points to keep in mind are.
Where to buy silver.
What silver to buy.
How much to pay for the silver.
Where to Buy Silver
When looking at where to buy silver the following points need to be considered when selecting a trustworthy silver dealer or mint from whom to buy the silver:
Finding out who the dealer is?
Do they have their contact details available on their web site?
Are they contactable by phone?
Do they actually talk to customers?
Do they have silver in stock or will you have to wait for it?
Have they been in business for years or are they only new?
Are there any complaints about them on the internet?
How do their silver prices compare to other silver dealers?
Do they offer silver with a low premium over the spot silver price?
What silver price do they pay when you go to sell silver back to them?
How much do they charge for delivery and insurance?
Doing some due diligence on the silver dealer is most important for the security, not only of buying the silver, but also handing over your personal details including credit cards, bank account etc to an unknown. Established silver dealers are the ones to look for.

What Silver to Buy
Sterling silver, for example, can look very nice on the dinner table, but is not really suitable for silver investment or savings purposes. Sterling silver is not pure silver but has a proportion of copper included to enhance the durability and hardness of the piece. Silver jewelry usually has a heavy labor cost attached to it. Silver ‘Theme’ coins and coin collections suffer the same problem. They have a very high premium and often contain substances other than silver. These are mainly for collectors and numismatics. There is no guarantee that the premium one pays when buying collectible or theme coins will be recouped when its time to sell

How Much to Pay for Silver
The price of silver is of course equally as important as where to buy silver and what silver to buy, if you pay too much above the spot silver price it will take longer to recoup your investment. Many people buy silver as a hedge or safe haven, so the premium they pay makes a big difference to their asset in this instance. Some silver coins attracts a high premium such as proof silver coins. Purchasing silver in small quantities will also increase the premium one pays. Buying a one ounce silver coin will generally have a much higher premium or ‘mark up’ than a reasonable sized silver bullion bar such as a fifteen kilo silver bar or even just a one kilo silver bar. Silver rounds also have varying premiums depending on the dealer and type of silver round being sold.

It is vital to do some research and check the various points above in order to gain the best possible advantage when it comes to buying silver. The astute and prudent silver investor will know how to buy silver because they have studied all aspects of buying silver and how to obtain it at the best possible silver price.

No comments: