Do you own a lot of silver? Do you have any cash left over at the end of the month? Are you tired of selling things to pay for your growing collection? If you answered yes to any of these questions, it might be time to look into establishing some guidelines for how much silver you should own. There is no perfect answer, but there are some general principles and factors we can consider that may help us decide how much silver is right for us.
The value of silver fluctuates constantly. In fact, it was just last week that the price dipped as low as $16.70 an ounce, before quickly recovering back to around $18.50 an ounce. Therefore, it’s important to understand that your entire investment in silver will fluctuate along with the price of silver on a daily basis.
With this in mind, we would like to take a moment and explore the factors involved in determining how much silver is right for you as an individual investor.
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Volatility rating: 0% to 100%
One major factor to consider is the volatility rating. This is an indication of how much your silver investment fluctuates with the price of silver. A volatility rating of 80% would mean that you’ll lose 20% of your investment each day, while a rating of 100% means that no matter what happens in the market, you’ll never lose more than 10%.
Two other factors to consider are capital gain and interest rate. Capital gain deals with the profit you earn from investing in silver; it’s calculated by multiplying the percentage gain by your total amount invested. Interest rate refers to the interest earned on your capital gain, which is typically calculated by dividing your daily rate by 365.
So if you are currently investing $1,000 in silver each month and your desired volatility rating is 80%, then you will experience a loss of $200 cash per month or $2,400 a year. If instead you were willing to invest $3,000 in silver each month but wanted a less volatile investment that would yield only $100 per month, then this would be considered as having an annualized interest rate of 3%.
How much silver do you need?
First and foremost, it’s important to understand that there is no perfect answer in terms of how much silver you should own. This is because each individual has different financial goals, budget, risk tolerance, and personal needs.
One thing we can do is consider the amount of silver you need in order to achieve your goals. In general, investors want to know what the ROI (return on investment) will be on their collection. For example, if you are looking to buy gold and silver as a hedge against inflation or a store of value during uncertain economic times, then it might make sense for you to purchase more than one ounce of gold and silver. If you are looking to use them as investments for retirement savings or property-related wealth accumulation strategies, then one ounce may be adequate for your needs.
It’s important to note that there is no hard-and-fast rule when it comes time to determining how much silver an individual should own. However, if you start out small with a low purchase price and see that the investment returns are meager at best, then perhaps it’s time to increase your holdings gradually over time with longer-term goals in mind.
How long do you plan to hold your silver?
Investing in something like silver is a long-term investment. Silver is a commodity that tends to appreciate over time, so it’s important to understand if you plan on holding your silver for several years or only a few months before selling it for cash.
If you’re planning on holding your silver for a few years, then you might be better off investing in something like gold, which is more well-known and has been around longer than silver. If you do decide on investing in silver, then focus on owning 1 ounce of the metal. Depending on how much weight you actually have, this may mean buying $1,500 worth of the precious metal.
Are you a bullion or an investor?
First, we should decide whether you are a bullion investor or an investor. Bullion investors buy and sell silver bars, coins, and rounds as an investment with the goal of making money. In contrast to this, investors purchase silver primarily for its intrinsic value within the monetary system. Investors want to own it because they believe that silver is going to be valuable in the future.
If you are a bullion investor, then your goal is to buy low and sell high on your investments. You want to make the most amount of profit possible from your collection, which requires buying when the price is low and selling when the price is high. This strategy typically makes money for those who hold on during periods of instability or uncertainty in the market.
If you are an investor, then your goal is different. The difference between investors and other types of silver buyers is that investors buy more than what they need in order to meet their needs withsilver bullion purchases. They purchase their full inventory at once with no intentions of selling their holdings anytime soon. Thus, they have a smaller risk profile compared to bullion investors who deal with fluctuating prices throughout time. Additionally, they may use leverage so that they can invest more money now with less risk later on down the road (such as through margin trading).
However, if you are unsure about whether you’re a bullion investor or an investor-you might consider starting off small by investing in one ounce of silver coins or
When should you sell your silver?
Silver is an investment that should be constantly monitored. It’s important to understand the value of your silver, and when it dips below a certain threshold (we recommend you sell your silver when it dips below $16.70), it’s time to cash out. Our suggestion? Sell any silver at or below $16.70 an ounce and buy more when the price rebounds!
Bottom line
It is hard to say exactly how much silver should be owned by one person. You should consider the size of your collection, what each individual piece means to you, and how much you are willing to spend on it. The bottom line is that it’s up to you and only you can decide what amount of silver is right for you, but we hope this article has given some helpful guidance in doing so.
FAQ’s
How does the value of silverfluctuate?
Yes, I do own a lot of silver. I have more silver than paper money and precious metals combined. My cash is always running low while my spot price is always up. I am tired of selling things to pay for my growing collection. I am in debt, but don’t care.
There are many factors that effect the value of silver and no one factor will change the value forever
• Supplies and demand. The supply of silver is controlled by the mine output and by its use as an industrial metal, a jewelry alloy or in dentistry. The demand for silver will be driven by economic growth and inflation.
• Interest rates. A rising interest rate can make buying less convenient or more expensive for investors and traders, therefore reducing demand for silver to meet an investment goal or speculating gain.
• Silver prices going down due to supply shortage will lower demand as investment metal.
How much silver should I own based on the current market conditions?
I have been a long time silver bull and have accumulated a significant amount of physical silver, both in my savings and in several investments. I try to follow Warren Buffetts Golden Rule of owning any asset that you might need in the future. I currently own 45-55k ounces of physical silver in various private accounts, 35k ounces that I own directly in a brokerage account, and I have about 200k in the IRA (which is not commingled with any other assets). At present, based on the conversations that I have had with my financial advisor and others, based on my analysis of prices and what assets I believe I need to be fully diversified (cash, gold, stocks), I would say that I should hold at least 65-75k ounces of physical silver.
I would definitely advise someone starting out as I did to keep some cash on hand for unforeseen emergencies. You never know when you will need to make a purchase for silver or other items that you may need for your collection. At the same time if you can invest your cash somewhere safer than a bank account then do so. Something like treasury bills would be a good choice as they are government backed securities.
I am not at all tired of selling things to pay for my collection. If anything it is the opposite as I now have more than enough assets invested in assets that could potentially appreciate substantially in price over the next few years.
How do I know when I have reached my limit of silver purchases?
I understand this, this is what worries me to. It’s very easy for the price to soar or for it to crash down. One thing I have done is buy a cheaper fractional bullion like 10 Troy Ounces in 2012 and after 6 months it became worthless, so now I’m only buying full troy ounces, I think my minimum position is 1 full troy ounce, because if the price gets too high, I will exit quickly before the whole price goes up.
When the price is at that amount of silver you have decided on you are ready to sell your investments. One small mistake can cost you a lot of money and can take years to get back to normal again (for example when the price crashed due to a social media bot). It’s also very important that you have plenty of emergency fund in small amount of bank accounts (if possible) in case something happens and your salaried income disappears for couple of months or longer
I think if you are satisfied with your current silver investment (be sure not everybody is ). Just remember that one trillioon ounces is the equivalent of .9999999 ounces so it will take a lot of time to accumulate so make sure it’s something worth your while before selling.
