Silver Stock Market Trading: 10 Mistakes to Avoid

Silver Stock Market

1. Investing more than 10 % of your total investment portfolio into silver stock market is too risky. It’s better to keep your portfolio well diversified to be able to withstand silver and gold bullion market fluctuations.

2. Not understanding the difference between buying physical silver and investing into a silver bullion trust could cost you money in the long run. Weighing all pros or cons of storing physical silver vs. buying silver futures and shares will help you make an educated silver investing decision.

3. Preferring silver numismatic coins over silver bullion coins or bars is perhaps one of the biggest silver stock market mistakes. Sure, it might seem attractive to add a rare silver coin to your collection; however, it might be hard to assess coin’s true “rarity” factor. In addition, you usually end up paying more for silver numismatic coins compared to silver bullion coins and there’s not guarantee that you can return your investment value upon sale.

4. Not distinguishing between silver shares and silver exchange traded funds is another big mistake to make. Silver exchange traded funds allow you to purchase ownership of silver without physically keeping it. Silver stocks, on the other hand, do not deal with silver bullions but are actual shares from gold mining companies. Investment approach could make a difference in the silver stock market

5. Another common mistake many novice investors are making is buying stocks under a certain minimum established by a stock broker. This will force you to incur extra costs in additional stock broker fees.

6. No stock analysis skills. Your ability to analyze silver investment stocks will make or break your silver portfolio. Learn these basics before setting foot into the volatile world of silver investment.

7. Not following economic indicators is a huge investment mistake to make. Major economic indicators like inflation, unemployment, gold price, supply & demand and many more will help you speculate at the silver stock market.

8. Not understanding stock charts can cost you significant losses in the silver stock market.

9. Not taking into account high capital gains tax on the sale of gold and silver commodities. Any player participating in the silver stock market needs to understand that gold and silver investments are treated as collectibles by the IRS and capital gains earned from owning these commodities are taxed at a higher rate of 28%. In case, you decide to sell your silver investment within the first year of ownership, you might be facing an even higher tax rate of 35%. Taking these numbers into consideration will help you make the right decision.

10. Buying into small silver and penny stock companies is very risky due to extremely volatile stock market and no obvious trading history of such companies. Lack of information makes it very difficult to research a certain silver stock and determine its performance potential.