How to invest in silver?

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No hace falta poseer de un gran capital para invertir en uno de los metales preciosos que más se han apreciado en los últimos años, como es la plata. Este deseo se puede formalizar desde pequeñas cantidades para realizar una inversión que pueda canalizar esta demanda por parte de pequeños y medianos inversores. Sea cual sea el caso, la oferta no es tan amplia como en otros activos financieros, like gold. With the problem that not all entities have this private investment model.

On the other hand, they can physically open positionsIn other words, through bullion or coins or through investment funds exposed in this precious metal. This last alternative is the most common among savers who see the most appropriate way to access this market without taking on certain risks and with the great utility of capturing the upward movements of this precious metal of special importance. To the point that it is one of the means chosen by those interested in making this type of investment.

Investing in silver: profitability

Investment funds based on this precious metal are configured in the best of strategies to carry out this special investment. The main attraction of these financial instruments lies in the fact that they have a higher appreciation potential than that presented by other financial assets. With an annual yield that is available to exceed levels above 20% if they are aimed at the medium and long term. Even when on the contrary, they have a greater risk than in other investments due to the volatility in which they configure their prices.

Investors today can find themselves with a limited variety of markets and products exposed to silver, from publicly traded mining companies (generally in the North American and English stock indices) to more sophisticated ones such as futures and options. However, their biggest hindrance is that these financial instruments require prior knowledge of them. This being the main reason why, in the end, they must be formalized under the supervision of an expert in these markets. Who will be in charge of choosing if it is time to open positions in these financial assets or if, on the contrary, it is a very risky bet for their personal interests.

Silver bullion as an option

Another option offered by the market is through the physical purchase of silver that can be made through bullion and coins. The great utility of this investment initiative is that it can be done with very affordable amounts for all households. Others involving a higher financial outlay to make the savings profitable. Whatever the case, investing in precious metals such as silver can be a great option for small and medium investors. Where, in the spot market, investors buy metals from large banks with the main purpose of avoiding costs and risks.

Another option is represented by the futures markets. Through this unique model in alternative investment, they can access the market through futures exchanges, where people negotiate contracts to buy or trade a raw material at a fixed price until a specified date. Entities that serve a diverse clientele of precious metal bullion producers and consumers can be found in a range of industries, including mining companies, foundries, processors, jewelry manufacturers, and dealers and brokers.

Cash operations

On the other hand, bullion-related brokerage and banking services include cash transactions, long and short term future, opciones y derivados vinculados a la plata. Inclusive puedes hallar monedas en este metal precioso a precios competitivos, que van desde pequeñas cantidades hasta otras de mayor relevance que parten de los 10.000 o inclusive más euros. En este aspecto, cabe destacar que la inversión en metales preciosos debe considerarse de alto riesgo. No en vano, se ajusta a la legislación de oferta y demanda en los mercados internacionales y eso determinará su valoración en sus respectivos mercados financieros.

Although silver has been one of the financial assets that has appreciated the most in recent years, there are no less precautions that investors should take in the hypothetical taking of positions in this metal due to its own characteristics and the limitation of products in the market. market. It is for this reason that the pros and cons of this investment and, once analyzed, opt for the best option for the interests of savers, depending on their investment needs.

Risk factor's

The jewelry sectorEven though it maintains a representative weight, it appears to be structurally in decline. Manufacturing fell dramatically from 1997 to 2002, even as it has recovered in recent years. What is the reason for this latest rally? How likely is it to be consistent? To answer the question, it is essential to understand that during the years 1997 to 2003 the claimants of gold for recreational use were first world countries. The certain saturation coupled with the bursting of the technology bubble and the fragility of their economies inhibited demand.

In 2003, the trend changed as China, and to a lesser extent India, they start to export massively. These currencies create a wealth effect that triggers consumption in these traditional areas. Speaking of traditions, a curious example is found in the religious sphere. The Golden Buddhas are made by means of gold leaves that the faithful deposit to cover the Buddha and that they must replace annually.

Central banks

Although it is true that Central Banks are prone to decrease their sales and purchases could be reconsidered due to the rate situation, it is also essential to say that the reserves of the USA, Germany and France are still very large and this limits the potential. bullish gold as a result of purchases by Central Banks. There are two interest rate situations that are delicate. Some high and stable interest rates (because they drive forward sales to make up the balance sheets) and a downward trend (not to be confused with low rates) due to the cost of possibility that is lost by not investing in fixed income.

There is an opportunity for increased mining production. Not for new farms, but for larger farms. production of existing. This risk is limited by the high dividends that gold mining companies have been paying. The reinvestment policy has been minimal. Another risk factor is the strong weight that ETFs and other derivative instruments have on the price of gold and on the inflows and outflows of this asset.

Trading in other currencies

The appreciation of the US currency given the negative correlation that it has historically presented with silver. It is essential to remember that volatility of silver funds around 15%. The high levels expected for silver in the coming years have as a counterpart that they are necessary but not sufficient factors. If it is not accompanied by cost cuts or at least cost containment in mining companies, the upward path could be narrowed.

In recent years, an important meeting bullish that has benefited all savers, who in one way or another, have positioned themselves in the silver market and, which has been configured as one of the more likely to deposit savings for the enormous profits it has caused in recent years, above other top-level financial assets and, decidedly, outperforming international equities.

Compared to the bag

You just have to remember that the Ibex 35, in what has been a bad year 2018, it has depreciated around 15%. Although on the contrary, this precious metal has closed this year with a wide revaluation. This evolution in recent months has been accompanied by those experienced by other precious metals: gold, platinum, palladium, etc. and whose capital gains have also been placed in the double digits. As one of the options for the traditional sale of shares in the equity markets.

It is in your favor that it is one of the financial assets with the highest appreciation in recent years. At the same time, it has become one of the safe haven values par excellence to face investments in times of uncertainty and economic instability. This is one of the reasons why financial organizations have chosen to offer financial instruments of these characteristics. In other words, linked to this precious metal.