Investing in silver and other precious metals can be a risky venture if you don't take the time to research and familiarize yourself with common investment terms and methods. To avoid costly mistakes when investing in silver, you'll need to be familiar with the following precious metal investment terms and phrases.
Bullion
This is a very important term to know when you're investing in silver. Bullion is the term for a precious metal that is commonly in the form of bars or ingots and is at least 99.5 percent pure.
Fineness
To avoid being ripped off or investing in an impure form of precious metals, you need to know a product's fineness. The fineness of silver bullion, coins, or other items indicates purity. It reveals how much silver is in an item in relation to additional metals. The better the fineness, the more valuable the bullion.
Spot Price
This is an important term to know when buying silver bullion and coins. The spot price is the actual market value of silver, gold, or other precious metals at a certain time. Prices change, but it's very important to know the spot price of silver at the time you're buying it. Try to find a seller of bullion or coins who will sell them very close to the spot price so you'll know you're getting a good deal.
Troy Ounce
This term is used to measure amounts of silver and other precious metals. A troy ounce is a unit of weight, and one troy ounce equals approximately 31 grams.
Numismatic Value
When you're beginning to invest in silver or other precious metals, you should first start off by buying coins for their silver content, not their numismatic value. Numismatic coins are coins that people value for traits such as rarity, condition, and mint marks; in other words, not for the amount of silver they contain. If you have connections with knowledgeable coin collectors and believe this is a more profitable route, you can purchase silver coins for their numismatic value.
Bull or Bear Market
When you're investing in silver, knowing when to buy and when to sell is of utmost importance. This is why you need to know the terms bull market and bear market as they pertain to silver and other precious metals. A silver bull market means that the value of silver is expected to increase over a period of time. A silver bear market means the value of silver is expected to decrease.
