Almost a century ago, precious metals like gold and silver were the standard on which the entire US currency was based on. The gold standard meant that any amount of paper money could be redeemed by the government for its value in gold. While the system worked well for a while, it all went down the drain with the finding and exploitation of new gold deposits. At the same time, as the economy flourished, the consumers preferred to do their transaction in dollars due to the enhanced convenience.

The raise in gold and silver values

By the 1970s, it became clear that the US government doesn’t have the reserves to back up the paper currency holdings. Consequentially, after two attempts to adjust the value of an ounce of gold in dollars, they were forced to drop the gold standard altogether. Nowadays, commodities such as gold and silver are highly valued and more desirable than ever. While silver may not seem like the best investment, it’s a critical part of a well-balanced portfolio. If you’re ready to expand your portfolio and create a safety net for your funds, here are some rules to remember when investing in silver.

The rules of investing in silver

Due to its inherited value, silver represents a security blanket against potential economic disaster. To make the most out of your investment and ensure a safe haven, here’s what you should remember:

• Set a maximum percentage for the silver holdings

Because silver commodities are volatile assets, it means they come with the risk of loss. This is why experienced financial advisors recommend entrepreneurs to dedicate around 5% to silver in their portfolio. Without denying the fact that silver will always have a value above paper currency, the truth is that it takes time to bring a profit and your money will be tied up until that point.

• Build your silver portfolio slowly

To maximize the investment’s value and save some cash, you should purchase silver when it’s at a periodic low. Moreover, to avoid losing too much when the market drops, it is wise to acquire small quantities of silver until you become familiar and comfortable with its fluctuations.

• Diversify by purchasing stocks

In the event you learn about a profitable silver mine that is forecast to perform well in the future, then don’t hesitate to buy some stocks. Whenever the silver prices go up, so will the value of your stocks. The advantage in this case is that you can make an easy profit, while still being able to hold onto your silver.

• Be up to the date with silver price fluctuations

By knowing how and why silver prices fluctuate, you will be able to make more educated investment decisions. Moreover, being up to date with the silver market also helps you anticipate the next market swings and hence, avoid a devastating loss or even turn a substantial profit.

• Shop around for a reputable dealer

In case you intend to invest in real silver, then it’s highly advisable to work with an experienced dealer who can service you without delays. After all, time is critical when buying and selling silver.