Sure Way To Lose Money In Silver

In silver investment, all physical and investment grade silver can be categorized into 3 types which are low premium, medium premium and high premium.

Example of low premium are such as Sunshine bar, APMEX bar, ASE bar, Morgan bar, Johnson Matthey bar, Buffalo round, Scottsdale Omnia round etc. This kind of bars or rounds have very little premium, which means the price is not too much above silver spot price. This type of silver is value-for-money and you basically get the most silver out of your money.

Example of medium premium are such as American Silver Eagle coin, Canadian Maple Leaf coin, PAMP SUISSE silver bars, Kookaburra coin, Chinese Panda coins, Canadian Cougar coin, Fiji Taku coin, etc. The price for this type of silver has a higher price compared to the low premium silver (1oz to 1oz comparison). However the detail of such silver is usually finer and looks much more attractive compared to low premium silver.

Examples of high premium are such as Perth Mint Proof coin series, Mongolia Long-eared Hedgehog, etc. This type of silver usually comes with an exclusive packaging, sometimes certificate and even serial number. The premium is extremely high where the price could be 3 to 10 times of silver spot price. High premium silver is suitable for personal collection and not investment purpose, at least for most people. It requires very specialized skill to make money from high premium silver. Else, most of the time you will see people losing money in high premium silver investment.

When comes to silver investment, many investors don’t make money because they don’t know what they don’t know.

If you are new to silver investment in Malaysia, you might not realize there was a Dragon Fever in late year 2011. The Dragon Fever was referring to the Perth Mint’s Australian Lunar Silver Coin Series II celebrates the Year of the Dragon (dragon bullion coin). Well, usually people just call it as Dragon. Dragon is just a medium premium bullion coin but the price was speculated so high until it seems like a high premium silver coin.

When Dragon was first launched in late 2011, the price in Malaysia market went up to as high as RM420 for 1 oz of Dragon coin. Most people bought the Dragon coin for RM3xx in early 2012. Then, Dragon price further dropped down to RM2xx for some lucky buyers. Today, the coin was being transacted at RM172 only. If someone bought the coin for RM420 in late 2011, he is literally suffering 60% lost for the coin.

Let me repeat this…

When comes to silver investment, many investors don’t make money because they don’t know what they don’t know.

For most silver investors (especially the beginners), I would suggest you to start by buying low premium silver and only allocate a small portion (20% – 30%) of your budget into medium premium silver. Save the high premium game to a later date when you are more familiar with the market.

Consider it this way. Premium is equivalent to risk. Replace the word “premium” with “risk” and you will appreciate why I suggest new investors to start with low premium silver. The lower the premium is, the lower the risk is and the safer the investment is. I won’t deny there are people who can make good profit from high premium silver. Those are the people who have specialized knowledge and their own particular network to liquidate the high premium silver. For the majority of us, it is a better idea to stick to low premium and medium premium silver.

I wrote an eBook titled Practical Guide For Investing Silver in Malaysia. This eBook specialized in showing you how to invest in low premium and medium premium silver. In fact, I would also show you other common mistakes you could potentially made like in the Dragon coin. Take a look at it here:

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