Ever since I have posted an article titled “Silver Price in Malaysia”, I’ve been receiving some emails from readers on how to invest silver in Malaysia. In this article, I’ll be sharing some of the factors to take note while investing silver in Malaysia.
Research on the type of silver in Malaysia, know your options.
This is the most important step before starting to invest silver in Malaysia. Silver appears in many forms in Malaysia. Although almost all silvers are imported from overseas, there are legal tender coins, rounds, variety sizes and brands of bars are being traded freely in the local market. Conduct brief research on local online forums, Facebook group pages and local websites where the silvers are being traded. You have to understand what options you have before you invest silver in Malaysia in any form of silver. If you do not know your options, very likely you will be ‘slaughtered’ by the market rather than making money from it. For example, one of the local retail sellers who provide a Guarantee Buy Back scheme and another do not. However the sellers who provide a Guarantee Buy Back scheme do charge a higher premium for the silver while another seller is selling at a cheaper price. You will have to decide for yourself whether you the option of buying silver at a lower price or the option of buy a premium silver that tied to a Guarantee Buy Back scheme. Analyzing all the options to invest silver in Malaysia could be a little over-whelming in the beginning, but once the first round of analysis is completed, the coming investment journey is very much smoother.
Investment goal is a must and keep to your budget.
Just like any other form of investment, you must have a clear investment goal while you invest silver in Malaysia. An investment goal merely means what is your plan to enter silver investment such as what form of silver to buy. Then you would have to determine how would you manage your silver investment such as whether to practise dollar cost average by using certain amount of Ringgit to buy silver every month. Lastly is to find determine an exist strategy. Many experts believe silver is destined to shine in the near future; therefore having 3 – 5 years holding period (or even longer) before cashing out your silver might be a good idea. However, one of the very important notes is NEVER borrow money to buy silver. You should only invest silver in Malaysia with excessive cash that you do not need because silver spot price is a highly volatile. You must keep to your budget while investing silver as you do not wish to trap into a situation where you borrowed RM 10, 000 from financial institution which charge you 10% interest and your silver investment has been falling in value (as silver price could drop anytime without prior warning). Since silver has a lower liquidity in Malaysia market (compare to gold), which means when you need to cash out your silver, it might not be easily turn physical silver into cash very quickly. Therefore you must have an investment goal that you are comfortable with and only invest silver in Malaysia according to your budget.
Deal with silver with honour.
You will with a dealer to invest silver in Malaysia. There are many silver dealers in Malaysia. The dealers consist of individual dealers, dealers who work in a network and retail dealer who rent a commercial unit to sell silver. In the precious metal business, bear in mind that honour is a very important element. Traditionally in Malaysia, precious metal is a business where the industry player might not be highly literate but the industry players do honour their words in their transaction. A lot of silver dealers in Malaysia do allow their customers to ‘lock in’ the spot price through a phone call as a value added service to invest silver in Malaysia. Many buyers would take advantage of this service to ‘lock in’ the best price. However the buyers do not have a crystal ball to predict the lowest price. If the price started to fall 5% (which is very likely to happen) from the price the buyer has just ‘locked in’, the less honourable buyer would cancel the previous order to avoid the paper loss of 5%. This is not an honourable act. Currently there is no official law that prevent such behaviour; however there has been a local case in Malaysia where the dealers threaten the buyer for a lawsuit if the buyer does not honour the deal. Bear in mind that invest silver in Malaysia could get yourself into trouble if you do not honour your verbal deal.
There is not a lot of available resource available that discuss about how to invest silver in Malaysia, I hope this article would serve as a starting point for you to invest silver in Malaysia.