How to Buy Silver and avoid Scams

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Silver coins and silver bullion in the forms of bars and rounds is a great investment. Silver has been rising along with gold and other commodities as a safe haven investment with the dollar falling and global markets uncertain at best. With any good investment and transfer of money come scams and cons to seperate you from your hard earned nest egg investment. Here are some ways to avoid scams when buying silver.

  • Never buy silver funds commonly called EFTs. They are regulated very little and most likely don't own silver they are selling. They make money on fees and storage. They charge storage fees for silver and gold even when they do not physically have or store metal. They count on purchases, like bank deposits, being long term so they can make money borrowing against your account or backing what they are doing. They are not audited for deposits of silver, possession of silver and like other businesses they can go bankrupt taking your investment in silver with them. Take possession of what silver you buy.

  • Don't buy silver futures. Commodities futures are always risky. With physical silver you don't risk complete loss of value like stock and futures, especially leveraged futures can bring. Many scams are played with brokers or brokerages not actually making a leverage silver trade. If the price rises you are told the silver trade couldn't be placed or was place late at the higher price. If the price falls and you bet on silver rising they can call it due and keep your money. Again take physical possession of silver bullion.

  • Avoid coins, often called numismatic investments. Silver bullion rounds and bars are fine. The spot price plus a small premium is what you pay for bullion. Rare coin value is always subjective to the coins being graded and are inflated for the value over the silver content that the rarity brings. Silver bullion is sold for about 5%-9% over spot. Cion dealers can double or triple the cost of rare coins. That means if you buy and sell the same day you lose about 7% on silver bullion bars and rounds. You may lose 30% to 70% on a coin with the same dealer doing the common mark up. Buy for silver content, not rarity or collectors value.

  • Never buy from television or magazine adverting. Silver bullion sold as a collectible or commemorative coin is marked up often 5 to 10 times or even more over the cost of the silver. Like rare coins if you try to sell the same day you lose lots of money. In a few years time the mass produced collectors editions are sold by any coin dealer at the cost of other silver bullion. The sellers of commemorative coins have a huge mark up to pay for expensive ad campaigns and silver is sold for many times the actual metal value.

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