Buying Silver a good idea right now?

I am a student an have never really invested before.
I have about 10k lying idle in my savings account and I thought of investing in some physical silver.
I intend to sell it after 6-12 months.

Is this a good idea?
I there something else I should be investing in?

Silver is the most volatile commodity to take a trade into. Where it will be after 12 months.bias is upside.... BUT...10K for a student is abig amount...so read , learn..and be sure before u buy silver physically.

It may be far more profitable (and more risky too) to margin trade a commodity via a brokerage than to physically buy a product.

Whenever a metal goes up in value by 5 percent, ya stand a chance of doubling your money since ya only need to invest 5 percent (of the physical price of a metal) as a margin security deposit to trade one lot of a metal via a trading brokerage that offers margin trading. In the event a metal may drop by 6 percent, ya can also owe 1 percent of its value.

For less than 6,000 Rs, via a brokerage, ya can buy one lot of SilverMic or five lots of gold guinea (8g of gold for each lot of Gold Guinea.) Be wary of not selling a contract before it reaches its end/date of delivery (where the full value of the metal needs to be paid instead of only 5%) otherwise it's quite profitable to be trading Gold Guinea.

Investing in physical silver makes sense; however, while trading gold guinea, ya may be able to afford more than Rs 10,000 of silver in 3 to 6 months time with the rising prices (and therefore profit from margin trading) of gold.

Thanks, but I can't do any margin trading. I think if I open a trading and demat account, an investment of 10k will not even be enough to even pay off the account charges!

I can buy a mutual fund though! I recently got my PAN card. Is it a better idea than physical silver? I intend to get a 25% return at the least.
Another idea that struck me is that I can buy about 10gm of gold jointly with my parents

This is the wrong place for you to be asking this question. Commodities are highly leveraged instruments which can wipe out your entire 10K in a day if you are not careful.

Pick a quality large cap mutual fund and start an SIP into it for 1K per month for a year.
Hold it for at least 2 - 3 years.
Get the habit of investing started early . This is more important for you now than the profit that you may make on the investment.
If you start early, and stick to it, and most importantly learn as you go along, you should be in quite a nice place in a few years.
Gold is a good investment, but you can take more risk. You are still young and have plenty of time to go for nice safe investments.

Thanks pitbull!
That's an encouragement.

While I understand that commodities are volatile, i feel that gold prices are rising at the moment because of the europe fiasco. I also believe it will go higher in the festive season here in india.
Which is why i thought of making an investment in either gold or silver.

I have also thought of Mutual Funds, but they do not allow great profits while gold's prices always rise over the long and even medium term.

What am I thinking wrong?

Actually Gold declined from 1979 to 2001 and has only started moving up in the last decade.
http://www.the-privateer.com/chart/usgmonth.html


If you had invested Rs 10000 in Gold in 2000/1 at its cheapest , you would have had somewhere about Rs 60000 - rs 90000 now.

If you had invested Rs 10000 in Franklin Templeton Blue Chip Fund in 1993 at its cheapest, you would have roughly Rs 510,000 today.

If you had invested Rs 10000 in Infosys in 1997, you would have roughly Rs 30,000,000 today.

You do the math

Catching an Infosys at IPO is 99% luck but you won't even get a chance to do it, if you stick to "safe investments".

That is some info!
But you see, I am not investing in that long a term!

I am in only for a year at most, after which I intend to pull out tht money and go for more serious investments

IMO, rather than silver or gold.. its better to pick some good stocks that have good fundamentals and invest in it. One could do the same, in a staggered manner.

Srry t bump in with a different idea.. Just my Views:thumb:

Regards
Saivenkat

Price to margin trade 8 grams of gold/gold guinea is ~Rs 1100. 1 rupee increase or decrease in the price of gold is 1 rupee of profit or loss for every 8 grams of Gold guinea. Once I got the hang of margin trading a single lot of gold guinea, I found it profitable trading 5 lots of gold guinea/40 grams of gold when my capital was ~Rs 7,000

Ya can find margin security deposit amounts in the right most column on (Prices vary day by day: )
http://web.angelbackoffice.com/Rese... Daily Margin Requirement As On-8-22-2011.pdf

Cost of account opening in Sharekhan is Rs 1,000 or free (account opening charges deducted from brokerage.)

A mutual fund is a good idea. At the end of the day, it's what you're most comfortable with that brings in most profits.