Why to invest in silver

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.

Investing in Silver

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. But before investing in silver funds, investors should learn the benefits and strategies of buying precious metals. Silver as an investment has similar purposes as gold. There are industrial uses for silver, such as jewelry, but the price is driven primarily by supply and demand and investor speculation.

Typically, precious metals, such as gold and silver, are in higher demand when there is widespread uncertainty about currencies, especially with that of the U.

Silver is often used as a hedge against currency fluctuation or as a store for cash during times of economic uncertainty and unrest. The silver market is much smaller than the gold market, which makes for higher volatility fluctuations in price. Some investors prefer to buy precious metals, such as gold, silver, platinum, and copper, in the physical form of bullion coins. Most mutual funds do not hold silver as a physical asset. ETFs like these may typically have more exposure to stocks of gold mining companies than to silver and silver mining companies.

It is important to note that ETNs are debt instruments, like bonds, that do not invest in any asset. Although linked to the performance of a market benchmark, ETNs are not equities or index funds. The reason for this is that most investors typically want exposure to the price of silver, rather than stocks of companies associated with silver mining and manufacturing.

However, most precious metals mutual funds do not. As always, investors should use caution with all investment securities, especially those that they do not completely understand. Also, because of the speculative nature of silver and other precious metals funds in the market, investors should avoid short-term market timing strategies. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors.

Past performance is not indicative of future results. Investing involves risk including the possible loss of principal. Federal Trade Commission Consumer Information. Value vs. Mutual Funds Types of Funds. Full Bio Follow Linkedin. Follow Twitter. Kent Thune is the mutual funds and investing expert at The Balance. He is a Certified Financial Planner, investment advisor, and writer. Read The Balance's editorial policies. Article Sources. Continue Reading.

Investing in silver means putting your money into the production, trading or outright ownership of silver metal. For most investors this means. 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.

Physical silver is a tangible asset with no counter-party risk or default risk. Silver has an intrinsic value due to its metallic characteristics making it suitable for industrial, medical and ornamental use and due to its finite supply. There are also compelling fundamental reasons to buy silver. Chart: years history of the silver price.

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. But before investing in silver funds, investors should learn the benefits and strategies of buying precious metals.

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.

Why Invest in Silver

India has traditionally been a place where people have great fondness for precious metals like silver and gold. Among all the precious metals, silver, by virtue of being more affordable, has been a preferred choice of masses for ornaments and bullion investment. There is a good market, which offers fair price discovery and reasonable liquidity. All of these make this precious metal a good investment asset for many. However, the price of silver has been range-bound for quite some time, while gold on the other hand has done fairly well on medium to long-term basis.

Why Invest in Silver?

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. So if you're just getting started out in precious metals, read on to learn more about how they work and how you can invest in them. We'll start with the grand-daddy of them all: gold. Gold is unique for its durability it doesn't rust or corrode , malleability, and its ability to conduct both heat and electricity. It has some industrial applications in dentistry and electronics, but we know it principally as a base for jewelry and as a form of currency. The value of gold is determined by the market 24 hours a day, seven days a week.

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.

So why invest in silver? The reasons are manifold.

Should You Invest in Silver Bullion?

Silver may be used as an investment like other precious metals. It has been regarded as a form of money and store of value for more than 4, years, although it lost its role as legal tender in developed countries when the use of the silver standard came to a final end in Some countries mint bullion and collector coins, however, such as the American Silver Eagle with nominal face values. Collectors of silver and other precious metals who collect for the purpose of investment either as their sole motivation or as one of several are commonly nicknamed stackers , with their collections dubbed as stacks. However, while these bullion coins are considered legal tender, they are rarely accepted by shops [7] and not typically found in circulation, as opposed to pre-debasement ' junk ' or 'constitutional' silver coins, which still occur in circulation on occasion. The price of silver is driven by speculation and supply and demand , like most commodities. The price of silver is notoriously volatile compared to that of gold because of the smaller market, lower market liquidity and demand fluctuations between industrial and store of value uses. At times, this can cause wide-ranging valuations in the market, creating volatility. Silver often tracks the gold price due to store of value demands, although the ratio can vary. The crustal ratio of silver to gold is Physical bullion in coins or bars may have a premium of 20 percent or more when purchased from a dealer. Physical coins generally have a higher premium. In recent years ecommerce growth in the physical bullion industry has seen premiums reduced for retail investors to purchase products online with door to door shipping. Gold and silver prices for the years to in the table above is based on information from www.

Silver as an investment

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. While both gold and silver bullion can be appealing to investors, the white metal tends to get overlooked in favor of individuals investing in gold, even though it plays the same role.