How to invest in silver
What are the pros and cons of investing in silver bullion? Read on to learn why now may be the time for investors to enter the market. Silver just came off a more prosperous year than it has seen in awhile, and as prices rise, many investors interested in the precious metals market are wondering if now is the right time for buying silver bullion. With tensions running high, they could be a good choice for those looking to preserve their wealth in these difficult times. When political and economic uncertainty are rife, legal tender generally takes a backseat to assets like gold and silver.
Investing in Silver
People who invest in precious metals tend to appreciate the sense of permanence, stability, and tangibility that comes with owning an item like silver, whether it is sitting in your home safe or a huge vault somewhere.
There are many options when it comes to investing in silver, and, like all investments, varying levels of risk and reward. Consider the benefits of owning silver and your own overall investment strategy as you compare these options. Log in Facebook. No account yet? Create an account. We use cookies to make wikiHow great. By using our site, you agree to our cookie policy. Article Edit. Learn why people trust wikiHow. Co-authored by Michael R. Lewis Updated: March 29, This article was co-authored by Michael R.
Michael R. Lewis is a retired corporate executive, entrepreneur, and investment advisor in Texas. There are 19 references cited in this article, which can be found at the bottom of the page.
Explore this Article Deciding to Invest in Silver. Purchasing and Possessing Silver Metal. Investing in Silver Sans the Metal. Tips and Warnings. Related Articles. Part 1 of Decide when to buy silver. Every investor wants to know the magic formula that will let him or her know when to buy or sell.
Unfortunately, buying silver, like any other type of investing, is primarily educated guessing. This price happens to be quite close to the inflation adjusted price years ago, in For one, precious metals, including both silver and gold, typically are counter-cyclical. This means that they generally maintain value or increase in value during a recession. Additionally, silver has many practical, industrial uses, which guarantees that silver will remain in demand read: at a reasonable market price as long as other currencies remain strong.
Compare silver and gold. Gold holds an exalted position among precious metals because of its longstanding association with wealth and objects of beauty like jewelry and its significantly higher per-ounce value than silver. Silver, however, has many benefits as an precious metals investment, and may actually be preferable to gold in some respects.
The current price difference per troy ounce of gold and silver stands at roughly a ratio; in historical terms stretching back two-plus centuries, the ratio has typically been closer to This may mean silver would appear to be severely undervalued compared to gold and a good buy vis-a-vis gold right now, but of course there is no guarantee of that. This tends to give it a greater price volatility than gold. Diversify your portfolio.
This is sage advice for any investor, of course, and is just as true when talking specifically about investing in silver. Spreading your money around in different aspects of silver investing can offer you a greater chance of higher gains while offering the relative security of buying into a precious metal. Whatever its form, precious metals investing should not normally be the dominant focus of your portfolio. Use it as a way to further diversify your investments and to act as a hedge against some of the more volatile aspects of your portfolio.
In the end, however, the choice on how to diversify or not your silver portfolio is yours. Part 2 of Weigh the benefits of precious metal possession. Precious metals like gold and silver are distinctive in that they are a commodity with commercial and industrial applications, as well as a form of money in and of themselves.
People have been using silver as a form of currency for millennia, and its inherent value seems unlikely to change anytime soon. As always, diversification is preferable. But remember, possessing the actual item means you have to store it and protect it.
Buy silver bars. Purchasing bars of silver at the standard. These bars of silver are available in a variety of different shapes and weights. Silver bars can, however, be purchased from many banks as well as from bullion dealers.
Make sure you have a plan for securely storing and protecting your silver bars. A bank safe deposit box can be a good choice, or a high-quality home safe if you prefer to keep your bullion on your own property. Look into insurance for this substantial investment as well. Buy silver coins. When it comes to silver, you have far more coin purchasing options than you do with bars. All coin options are more portable and convenient than silver bars, but they also generally sell with a higher markup.
This is extra markup is due to the cost of designing and minting the coins. For instance, the U. To help you in purchasing silver bullion coins from reputable dealers, the U.
Consider collectible coins. Collectible coins were made with varying amounts of silver content and often minted decades or more ago. They have many other elements factor into their prices, such as historical significance, rarity, and even design.
Typically, the numismatic values of collectible coins are far greater than the value of their silver or gold content. Part 3 of Weigh the possible benefits of investing without possessing.
While it can be comforting to be able to see and hold your actual investment, remember that silver bars or coins just sit there and have their value determined by factors like scarcity and industrial usefulness.
Alternatively, when you buy stock in a good company, it can enhance its value through its own actions — earning profits, diversifying, expanding, etc. Even companies tied closely to silver can create value for your investment beyond just the fluctuating price for the metal.
Some people think physical possession of precious metals makes good sense during times of economic distress, or even some apocalyptic scenario when our digital world comes crashing down. However, if the worst-case scenario does happen and society as we know it is in tatters, how practical will it be for you to trade a silver bar for food or shelter anyway? Invest in a silver ETF. In recent years, precious metals ETFs have become a very popular means of owning silver without actually having the metal in your safe.
As with any investment, do your research before buying. Owning a silver ETF will save you the costs and worries of holding, protecting, and transporting your silver, but you lose the benefits of tangible possession and have to pay management and other fees, which cut into the value of your investment.
Look into mining stocks. Instead of investing in the silver itself, you can choose to invest in the companies that acquire it from underground.
Despite some myths you may come across, however, this sort of investment is more volatile, and silver mining stocks have increased in value at one-third the rate of silver bullion since Whichever options you choose, remember that investments in silver mining stocks are susceptible not only to fluctuations in the price of silver bullion, but also factors like labor unrest, supply chain problems, environmental concerns, and so forth. It is probably best to compare mining company investing to buying stock in other industrial sectors, rather than to buying actual silver.
Where can you find purchasers of physical silver or gold at its current price? There are many reputable coin dealers and others who deal in precious metals who will offer you the current spot price. Some have even been known to offer slightly more. Find them online or in your telephone directory under "coin dealers.
Yes No. Not Helpful 1 Helpful Not Helpful 0 Helpful 4. If I purchase and hold the actual silver myself, what generally is the liquid availability of it when I choose to sell some or all of it? If you take it to a local coin dealer, you should have no trouble selling it quickly.
A reputable dealer will give you full market value, according to its condition. If it's bullion, you should get current spot-market value. Until you learn more about investing in precious metals, a good way to start is with ETFs, as mentioned in the article above.
You can buy them through virtually any broker or mutual fund company. Not Helpful 4 Helpful 4. The value of anything you keep in a safe will not be credited to any account you hold. It is a "dead" asset, because the bank cannot use it to make money for itself. Not Helpful 0 Helpful 0. As a new risk-averse investor, what would you recommend as the best form to invest in with limited funds?
Many people say real estate, is that true?
Bullion silver is available in coin and bar form, and most coin dealers and precious metals dealers will offer silver bullion in various sizes and. The best way to invest in silver is to gain exposure to the price of this precious metal through mutual funds, exchange-traded funds (ETFs) or exchange-traded.
Gold and silver have been recognized as valuable metals, and have been coveted for a long time. Even today, precious metals have their place in a savvy investor's portfolio. But which precious metal is best for investment purposes? And why are they so volatile? There are many ways to buy into precious metals like gold, silver, and platinum, and a host of good reasons why you should give in to the treasure hunt.
The best way to invest in silver is to gain exposure to the price of this precious metal through mutual funds, exchange-traded funds ETFs or exchange-traded notes ETNs.
People who invest in precious metals tend to appreciate the sense of permanence, stability, and tangibility that comes with owning an item like silver, whether it is sitting in your home safe or a huge vault somewhere. There are many options when it comes to investing in silver, and, like all investments, varying levels of risk and reward. Consider the benefits of owning silver and your own overall investment strategy as you compare these options.
Is Silver a Good Investment?
The silver market has been volatile over the past 20 years, with a huge bull market that ran throughout most of the s and early s giving way to a big pullback in recent years. Now, however, some see silver as an investment that could take advantage of industrial demand, especially if new supply gets constrained by lower prices. Yet many don't know how to buy silver or why investing in silver can be lucrative. By understanding how you can invest in silver, you'll be in the best position possible to decide whether it's the right move for you. The clearest way to invest in silver is to go out and actually buy the physical metal. Bullion silver is available in coin and bar form, and most coin dealers and precious metals dealers will offer silver bullion in various sizes and formats.
Should You Invest in Silver Bullion?
Folks who invest in silver often say that doing so lets them hedge against the risk that their other investments might depreciate — and against the risk of catastrophic events. Much of the appeal of commodities like silver stems from the fact that they give investors something to latch on to. Those who want to invest in silver have a few options. You can buy the physical commodity and figure out a way to store silver bullion securely. You can also invest in a silver-backed Exchange Traded Fund ETF that trades on the market and offers a higher degree of liquidity. You can buy silver futures contracts and either go long on silver betting that its price will increase or short silver betting that its price will decrease. Alternatively, you can buy stock in a silver mining company. With the same amount of money, you can buy a lot more silver than gold. Skittish investors tend to flock to both gold and silver when an economic crisis has already set in, the stock market is down and metal prices are up. Conventional wisdom states that investors should buy low and sell high.
Aside from gold, no other investment can boast an impressive 4,year track record.
Market News. Invest in Gold, Silver, More. Your IRA Portfolio.
A Beginner's Guide to Precious Metals
Gold isn't the only game in town, even though you'd never know it by watching late night TV. Investing in silver means putting your money into the production, trading or outright ownership of silver metal. For most investors this means buying quantities of bullion in coin or bar form and holding onto it. While silver is technically a commodity like any other, precious metals are somewhat different as an asset class. Unlike crude oil, corn or lumber, the value of silver isn't limited to its consumption uses. In fact, while silver does have non-trivial industrial applications, most of its value comes from its status as an investment vehicle. Like gold, the price of silver is chiefly driven by market demand. Instead its value is chiefly driven by either long term investors or those seeking to ride out a down market. Often this means that silver again, like gold tends to perform counter-cyclically to the stock market. It is, however, at this point that we should note the enormous volume of bad reporting on the subject of precious metals investment. Many articles written on this subject urge investors to put their money into silver and gold because these assets are "real money" and inherently safer than fiat currencies. This is wrong. Silver has limited inherent value. While, unlike a fiat currency, its supply is limited, like a fiat currency it is real money only to the extent that other parties will to accept it in trade. Investors who believe in the "real money" theory of silver should try paying their bills in specie and see exactly how far that will get them.
How to Invest in Silver
In uncertain financial times, people have historically turned to gold and silver as a hedge against inflation and investment losses. But silver attracts heavy investor demand for a number of other reasons. Silver has the same attributes as other precious metals but possesses unique strengths and weaknesses. This can motivate a different type of investor behavior. New money is cash or securities from a non-Chase or non-J.
