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4 Common Silver Buying Mistakes and How to Avoid Them

October 1, 2022

There’s the perception that precious metals like silver are an intrinsically safe investment. And on the whole, there’s truth to that idea. Silver is scarce, has been used as a store of value throughout history, and is always in demand because of its varied industrial applications.

All the same, silver buying mistakes can happen.

Whether they’re the result of an oversight or a deliberate scam by unscrupulous vendors, these mistakes can be disastrous for your investments. So, to safeguard yourself from these mishaps, here are some common mistakes and how to avoid them.

1. Thinking That You Can’t Make Silver Buying Mistakes

The biggest mistake, and one that investors at any level can make, is to be too sure of yourself.

You may think that you’re too shrewd to be taken in by a scam. Or a well-intentioned but misinformed local silver dealer may have given you a bad tip. Whatever the case, no one is immune to making a critical error.

2. Falling for the Numismatic Up-Sell

“Numismatic” refers to coins that have value beyond their metal contents because they’re historic or collectible. And on their own, there’s nothing wrong with them. Many investors double as coin collectors.

The problem arises when you’re buying silver coins and a dealer applies a high-pressure sales pitch to try to get you to opt for rare coins instead of normal bullion ones. The dealer will try to convince you that they’re a bargain given their added value, meanwhile charging you an exorbitant markup.

Remember, if they were that valuable, the dealer wouldn’t sell them at a loss.

3. Buying Proofs Instead of Real Bullion

When you’re choosing a silver dealer, one of the things you want to look at is their selection. After all, a diverse range of products gives you more flexibility in how you invest.

However, there is one product that you should tend to avoid, in the form of proofs.

On their face, you might think that proofs are just as good as bullion coinage. The U.S. Mint issues both, after all, guaranteed to contain .999 pure silver by content.

Where they differ is that proof coins are minted with the collector’s market in mind. And because they’re marketed as collectibles, they tend to be much more expensive than bullion containing the same sum of silver.

4. Chasing the Price

An easy mistake to make in any investment strategy is what’s called “chasing the price”.

Precious metals like silver should be used as long-term investments. While it’s possible to flip them for short-term profits, it’s an unreliable strategy at best. And at worst, it leads to an investor experiencing losses when they try to speculate on where the current silver price will go.

If you spend too long waiting for the perfect moment to buy in, you may wind up never actually making your investment. So instead of trying to buy at the lowest valley and maximize short-term returns, focus instead on the long game.

Avoiding Silver Scams and Protecting Your Investment

A good silver investment strategy can be one of your greatest tools in hedging against inflation and protecting your wealth during an imminent recession. But falling for any of these silver buying mistakes can cause the best-laid plans to go awry.

The wise thing to do is opt to deal with a reputable vendor like CMI Gold & Silver. As the oldest bullion dealer in the United States, we have an unmatched pedigree and work with new investors to help them make prudent purchases.

To see why we enjoy the venerable reputation we do,  learn more about doing business with CMI.

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