Silver can be a valuable addition to your investment portfolio provided you take precautions at the time of purchasing.
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Dhanteras and Diwali are just round the corner and many people prefer to buy silver coins, jewellery and religious artefacts to celebrate these festivals. Silver is a precious metal that holds significant value in Indian culture. Whether for investment, adornment, or religious purposes, purchasing silver is a common practice across the country, especially during the festive time. However, the uninitiated may fall prey to the common misconceptions and pitfalls, jeopardising their silver purchases.
To ensure a smooth and informed silver-buying experience, it is crucial to avoid these 10 mistakes:
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Overlooking Purity
Purity is paramount when buying silver. Ensure the silver you purchase is hallmarked, indicating its genuine silver content. Reputable dealers will provide a certificate of authenticity, guaranteeing the purity of the silver. Silver contracts are offered in a range of purity levels, commencing at 99.9 (999 silver finesse) and scaling down to 80 (800 fineness).
Ignoring Hallmarking
Look for a hallmark on the silver item. The Bureau of Indian Standards (BIS) certifies silver items by a BIS logo, purity in terms of ‘fineness’ (e.g., 999 for 99.9% purity), the logo of the assaying centre, and the jeweller’s mark. This hallmark indicates the purity and authenticity of the silver.
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Buying Without Checking Price
It is recommended to buy silver after you know the market price in your city. It will help you negotiate the price. Silver prices fluctuate constantly, and attempting to predict exact movements is challenging. Instead, employ a disciplined approach, investing steadily over time.
Improper Storage
Proper storage is essential for preserving the condition and value of your silver. Invest in airtight containers or secure vaults to prevent tarnishing, damage, or theft.
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Not Performing Checks
Silver is not magnetic. You can use a strong magnet to check if the item is attracted to it. If the silver item is attracted, it might contain impurities or have a different metal mixed in it.
Buying from Unreliable Sources
Reputable dealers are crucial for ensuring the authenticity and quality of your silver purchases. Avoid purchasing from unreliable sources that may offer counterfeit or low-quality silver.
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Ignoring Additional Charges
Making charges can add to the overall cost of your silver purchase. Factor in these charges when buying silver jewellery or other artefacts.
Lack of Diversification
Diversify your investments across different asset classes, including silver, gold, stocks, and bonds. This approach mitigates risk and potentially enhances overall returns.
Neglecting Insurance
If you are buying expensive silver artefacts, it makes sense to opt for its insurance. Purchase insurance to protect against loss, theft, or damage. Comprehensive insurance provides peace of mind and safeguards your investment.
Not Researching
If you are buying for investment, conduct thorough research on its historical price trends, economic factors, and global demand. Understanding the market dynamics to take an informed decision and avoid hasty decisions making.
Adhil Shetty, CEO, Bankbazaar.com, says, “Verify the purity of the silver. Look for the BIS hallmark, which certifies the metal’s authenticity and quality. Confirm the fineness, represented by a number such as 999 for 99.9% purity, stamped on the silver item. Additionally, consider the reputation and reliability of the seller. Reputable dealers often provide certified products and transparent information. Compare prices across different sellers to ensure a fair deal.”
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By avoiding these common mistakes, you can make an informed decision. Silver can be a valuable addition to your investment portfolio provided you take precautions at the time of purchasing.
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