With the current spot silver hovering around the $31 per ounce mark silver is a bargain investment. While gold is usually in the news, investors should not forget about silver. If you are a small investor and if gold at $1600 per ounce is out of your reach invest in silver. It offers similar hedge properties as gold, yet often performs better than gold. You will not find a better bargain priced investment than silver.
Silver has one noticeable difference when compared to gold, it is more volatile. The spot price of silver can swing high or low sometimes without apparent reason. However, this opens the door for another kind of investing. Speculative investing can be very profitable when timed just right. Consider that silver is expected to peak at $40 per ounce this year. If you buy the metal at the current discount price there is the potential of garnering huge speculative profits.
On reason silver is currently undervalued is the dollar is stronger than most other world currencies. This has kept gold from soaring in price too. In addition, industrial demand is down worldwide, except in China. However, there is encouraging news regarding India’s exports of silver jewelry to the US and to Europe. Their exports are on the rise at the expense of gold jewelry.
There is enough financial turmoil in Europe to keep silver’s price around the $30 per ounce mark, with spikes up to $40 per ounce in 2012. While some do buy silver jewelry for investment purposes silver bullion might be the better choice. Bullion bars are popular with large investors who have the storage capacity to invest in bars. Silver bullion coins like The American Silver Eagle are also a great and convenient way to invest in silver.
The very fact that silver can be bought for so little is an investment opportunity, because silver will increase in price. It always does. With the EU facing recession this will keep silver high and help it peak. The dollar will remain strong in 2012 meaning silver will not reach that magical $50 per ounce this year. Still silver is worth investing in.
In closing, at $31 per ounce silver is the greatest bargain priced investment around. Since the price is expected to peak at $40 per ounce this year you can reap huge speculative profits if you invest now. Silver investing just makes sense.
Many financial and investment experts will agree that you are making a wise investment decision if you opt to buy silver bullion as a means to diversify your investment portfolio. In fact, silver as well as other precious metals such as gold and platinum have become an attractive investment alternative chosen by many investors that do not want to suffer the constant ups and downs and twists and turns of the stock market. Rather many investors have chosen to protect their assets against inflation and have decided to protect their savings from the unstable financial scenarios of the down economy.
There are many aspects you should take into consideration before you buy silver bullion. Among them is the current trend the spot price of silver has experienced lately because it is more convenient to buy silver bullion when the price of silver is low so that you can make a better use of your money. It is also important that you decide which type of silver bullion you are going to buy. There are many options available in the market such as silver coins and silver bars, and you should consider the option that is most tailored to your own financial goals. In addition, it is important to only buy from a reputable silver bullion dealer.
For many investors, relying on the services of a good dealer is the key to buying silver bullion at the best price possible. They agree that a good dealer is much more than just a professional experienced in buying and selling silver and other precious metals, but is also somebody who can provide them with accurate and timely advice regarding which silver bullion product they should buy. In a real sense a good silver dealer becomes your investment partner.
In order to choose a good dealer to buy silver bullion from it is highly advisable to ask for referrals. There is a good chance that fellow investors can recommend to you a couple of trustworthy silver dealers who have impeccable reputations to back up their services.
It is also a good idea to go to the professional board of dealers or any other professional association related to this activity where you can ask for information regarding a dealer in particular or just ask for a highly reputable one near your area. You can also check the Internet because there are many websites and forums where you can learn first-hand the experiences other investors have had with a particular dealer.
You may have heard of “Prooflike (PL),” “Semi-Prooflike (SPL),” “Deep Mirror Proof-Like (DMPL),” or Ultra Prooflike (UPL) Morgan dollars. What do these terms mean and how will they change the value of a coin? Numismatic coin experts label coins with a great variety of terms that either cause the value of the coin to increase or diminish. Understanding these differences will help you in your coin collecting efforts.
To gain an understanding of what category Morgan dollars are put into, consider the common way that the “reflectivity” of a coin is determined. To do this, place a Morgan dollar on its edge next to a marked line on a newspaper page that is full of standard-size text. Make sure that you have good lighting that is aimed toward the coin, but not directly into the coin. Look into the coin’s surface and make a mark next to the text that you can clearly read via the coin’s reflective surface. Based on the length of this reflectivity, you can make a guess at how the coin will be labeled.
If you can only read text that is 1 to 2 inches from the coin, then the coin is likely to be a semi-prooflike (SPL) Morgan. Morgan dollars that are rated SPL will have a frosted surface. Prooflike (PL) coins will have a reflectivity of 2 to 4 inches, Deep Mirror Prooflike (DMPL) coins will have a reflectivity more than 4 inches, and Ultra Prooflike (UPL) coins will have a reflectivity of at least 8 inches.
Be aware that performing this test on slabbed coins that have been encased in plastic or other protective coverings will not provide accurate results. These clear covers tend to significantly alter the reflectivity of a coin.
UPL Morgan dollar coins are rare, and many numismatic experts will argue that in order for a coin to be designated a UPL coin, it must have a reflectivity of at least 12 inches. Some grading services will designate different designations for the obverse and reverse side of a coin. However, most coins will not qualify as Prooflike unless both sides of the coin meet specific standards.
The terms Deep Mirror Proof-Like and similar terms were first developed specifically for Morgan dollar coins since these coins had a uniquely shiny, mirrored surface. The terms were eventually used with Peace dollars as well, and are now being used to describe many additional coins that have bright, mirrored surfaces.
On the open market, you will find yourself exposed to as many differing and contrary opinions as you will have investment options. The occupation the trader equates, at its most basic, to the capacity to make good decisions consistently, 100% of the time, under extreme pressure, when you and those you represent can potentially to lose a great deal.
As a profession, it requires a well-rounded background in math, business, psychology and economics. Which of these deserves emphasis is, again, another topic of contention.
One school of thought on the issue swears up and down that investment is a 100% psychological game, and that all traders behave according to their belief systems about markets rather than how markets work in objective reality. In other words, you do not invest in the market; you invest in hysteria and delusions experienced by other investors with regard to a completely intangible thing known as “the market”.
Such belief would lead you not to the study of economics, but rather to a close attention to the media. We will call this investor the type that invests “by heart.”
Take this hypothetical example: an investor wants to make predictions about spot silver in the future in order to make a profit. Looking at past circumstances, they notice that every time Ben Bernanke says anything quantitative easing, the price of precious metals like silver feels a significant bump in value. They invest accordingly.
Such an investor may even concur with the truth behind the investors are hearing nowadays with increasing frequency: Ben Bernanke secretly invests in the silver and gold markets, and this is why consistently makes gloomy forecasts about a world with no end to quantitative easing in sight.
Regardless of what Bernanke does in his private life, we notice a correlation between his press release and a hike in silver prices. Whether the man is actually a fantastically astute economist some means of super natural mystic, or a flat out crook seeking to make a quick dollar through manipulations makes no difference.
Another trader, sitting at a nearby table in a coffee shop, feels differently. This second investor, we will say, “invests from the brain” instead of the heart. When figuring out how to invest based on spot silver: “Greenback Resumption and Silver Risk”, a paper by an economist named Charles Calamoris.
Calamoris studies trends the spot price of silver demonstrated during the second half of the 19th century. Faith in federal government waned during this period of American history. Like today, this resulted in a highly volatile market. Our “from the brain” investor decides to invest in accordance to Calamoris’ arguments about what happens to interest rates during such periods of time.
The Federal Reserve just announced they would protect the US economy from the debt perils going on Europe. It is possible that if Europe dips into recession the FED could again pump the economy with more printed money. This policy will stimulate the economy but at a cost. When more money is printed that does not have the backing of anything tangible, like the dollar inflation rises. This means this is a great time to buy silver bullion before the spot price of silver heads upward.
Silver is an industrial metal and demand is heavy. However, the supply is low and supply cannot keep up with demand. This will help to keep silver prices up. The fear of Greece defaulting is still in the news and is a problem that does not want to go away. The very fear of a bankrupt Greece along with the possibility of Europe dipping back into recession is more than enough to shake the nerves of stock investors. As a result the stock market remains unstable. Yet silver bullion is trending up once again.
This last year saw silver come close to setting a new price record. Indeed, 2011 was a volatile year for silver and for all precious metals for that matter. Yet, many financial experts think silver will not only go way up in 2012, but is likely to stay there. This is because the Euro Zone is likely to hit many stumbling blocks as it works to fix their debt problems. For example, Portugal just had their credit worthiness downgraded to junk status. Indeed, Portugal could be a new Greece problem in the making.
It is probable that stocks will keep treading water in 2012, and the Euro Zone will continue to be unpredictable. This bodes well for precious metals. While many investors prefer gold as a hedge, it is very expensive. Silver offers the same investment and safe haven qualities that gold does but at a significantly lower cost, and silver often out performs gold. Precious metals are the perfect way to buffer your high risk and often unstable investments.
To recap, The FED just announced they would protect the US economy from Europe’s debt problems. This could mean the FED is prepared to pump more paper money into the economy to keep it going. Yet, this is not without risk, because pumping too much money into the economy raises prices and inflation. The Euro Zone will continue to wrestle with their debt problems in 2012. This means silver is set to soar in price.