Today you are going to learn the best way to invest in gold and silver. This is a different enough concept to warrant its own unique article, which will go further in-depth into explaining the nuances of investing in both of these precious metals

Why is there such a difference? Because silver is more volatile, has lower cost barriers to entry, and is a better platform for turning a quick profit. On the flip side, gold is more stable, offers the historically accepted hedge against inflation, but is much more expensive to purchase. You cannot simply rush into investing in these two wildly different metals by using the same investment strategy for both; doing this is playing with fire, and that is a game you are unlikely to win.

Instead, when investing in both gold and silver you need to play a more level-headed game, and use the benefits and drawbacks of each of the metals to achieve the best profit possible (or at the very least avoid losing money) By reading through this post you will get a far better idea as to the ins and outs of a nuanced precious metals investment strategy.

Investing in gold

Let us first deal with the most important of the precious metals- gold. If you are a new or beginner investor with very little experience, or you do not have huge amounts of money to play with, then you should use the relative stability of gold to afford you a greater level of protection from volatile price swings. Whilst it would be foolish to assume that you cannot easily lose money with gold, it is all about relativity. Compared to silver, gold has a track record of being more stable.

Therefore, you should take the approach of investing a proportion of your money in physical gold, or gold ETFs. Just let it sit there, gaining value as inflation ravages traditional investments and currencies (such as increasingly worthless paper money) If you are a beginner investor then you should be holding some gold as a store of value and purchasing power against inflation; do not get carried away with trying to ‘trade’ and make big profits, as this will likely lead to disappointment, and even quite substantial loss.

Investing in silver

Now let us turn our attention to silver, which is a popular subject of consternation amongst the precious metals brigade. In fact, even slightly criticizing the prospects of silver often garners a very aggressive response from certain elements in the precious metals community (the ‘silver will go up a dollar a day ad nauseum brigade) However, as the events of the past month have shown silver is extremely volatile. And yes, whilst it is capable of spectacular price rises, it is also capable of even more spectacular price collapses.

Therefore, you should use silver more as a vehicle for a bit of speculation. If you are new to investing then do not throw caution into the wind and do anything rash; this means avoid leveraged silver investments, or doing stupid things like trading your wife and kids in for silver bullion. Instead, use the lower price barriers of entry present in the silver market to buy a few dozen ounces of a silver ETF, then sell when the price rises enough to return a healthy profit. Don’t get too greedy and assume the price will rise indefinitely- this is asking for a financial bruising; therefore, it pays to sell when you reach a profit level you are happy with. You shouldn’t hold out for ‘silver to the moon’ theories (until hyperinflation hits)

And if the price falls? Do not panic sell your silver. Just remember that it is prone to big price rises, followed by big price falls. In the long run the outlook for silver is positive- there is too much paper money starting to flow around the system, which is highly inflationary.

In conclusion

Use gold to provide a solid and reliable base to your precious metals investment. On top of this, dabble in silver to try and learn how to read the market and turn a quicker profit. Remember that you can hold (and should) hold PMs for the long run too- they are the best hedge against inflation in most regards. In many ways that is the best way to invest in gold and silver.

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