Before going into an investment like gold and silver, you need to find out what it is all about. You need to know the benefits attached to it, the risk and challenges involved most specifically from those that are into the business. Gold and Silver are solid long term investments. A lot of people enjoy investing in gold and silver simply because it is profitable, fun and easy. As a physical store of wealth, you may not necessarily need to go to school to acquire knowledge about the business because anyone can learn how to start. In this article, I will talk about Gold and Silver stocks and let you know the reasons why you should invest in gold and silver. Also, I will hint you on how to investigate before investing.
Gold and Silver Stocks
It’s good to invest in gold and silver stocks but you would need to focus on pure gold or silver players (the mining companies) and an in-depth research is necessary. For the mining companies, higher prices for gold and silver ensure higher profit. Increased profits will always offset their cost.
You need to be careful because not all mining companies have the same bright future. Some will do extremely well while most will not and so you need to be able to differentiate between the three types of gold and silver miners:
⦁ Senior mining companies: they have so many operating mines all over the world. Examples are Goldcorp, Barrick Gold, Franco Nevada etc. it is safe to invest in these companies.
⦁ Mid-tier mining companies: they are much smaller in scale but their potential in terms of returns is bigger because of the profits they realize. Examples are First Majestic Silver, New Gold, Endeavour Silver etc.
⦁ The junior mining companies: they are new in the business. Starting up could be quite expensive and so the need for resources is big and so also the associated risk. So it is your duty to find out the ones that would create economic value.
Why Invest in Gold and Silver
I’m going to give you reasons why you should invest in Gold and Silver. The reasons are:
⦁ History has made us to understand that for more than five thousand years gold is the only form of money that has survived and not failed. This is because it has been seen and proved that during the period of challenges and crisis it has always been the safest investment that has the greatest potential to increase your wealth.
⦁ Silver is being referred to as a miracle metal simply because in world rating, it is the second most useful commodity after oil. The reason is that it is used in a large number of products and industrial applications like computers, iPhones, mobile phones, digital cameras etc.
⦁ Paper money has failed: For government to print new paper currencies, government would have to devalue the currencies which lead to inflation and the risk of hyperinflation.
⦁ Government has no power over gold and silver because they are not created and dependent on government.
⦁ As an investor, you can buy and own gold and silver privately and anonymously.
⦁ With the way things are going in politics and market demand, government will come under pressure to return back to currencies supported by gold which could cause the value of gold to rise in the future.
Investigate Before You Invest
⦁ You need to seek for knowledge from a reputable dealer or financial advisor you can trust. This is because some promoters do not deliver what they promise and may push you into the wrong investment.
⦁ Do not be in a hurry to invest because any sales pitch urging you to buy quickly could be a signal to walk away and hold onto your money.
⦁ You need to research the company by doing some searching around online. Find out about other people’s experience with the company online. You can also try to communicate by phone if possible to clarify any details. And also if possible, you can also contact your local consumer protection agency.
⦁ You should walk away from sales representatives that minimize risk or tries to shy away from disclosing the risk involved. A reputable sales representative would always disclose the risk involved to you.
⦁ Make sure you get a receipt for your transactions.
⦁ Do not restrict yourself to dealers alone, you can also buy through banks because they offer gold bullion at a lower markup than dealers. And you can also enter the name of the coin into an online search engine to compare prices from other dealers.
⦁ Ensure that you ask for a guarantee or certificate of authenticity for the bullion’s precious metal content. Research the company behind the guarantee or certificate because certificates can be faked.
Buying gold and silver can help protect your wealth and I am very sure that the practical application of these guidelines would help you from falling into wrong hands. In fact, by simply analyzing current stock prices and graphs we can see that there will continue be an uptrend in the market! Check out the video below for an explanation.
Once you've bought your gold and silver, don't just let them sit there. Use them. This free webinar my wealth adviser Minesh Bhindi will teach you how to cash-flow your gold and silver so that they give you a decent 12 to 26.6 percent in yearly returns.