Silver is surpassing gold as an investment preference. It is more affordable for most people, especially those just starting out in the investment game. Silver is also more widely used and demanded around the world. It is used in the production of electronics and appliances as well as many other consumer driven products. Many of these products are produced in countries with emerging economies such China, Brazil and India. Investing in silver stocks is one way you can invest in silver; however it is just one option we will explore here today.
First let’s look into the option of investing in silver stocks. As with other stocks when you buy silver shares you are investing in a company that is usually mining silver. This seems fairly straight forward; however it pays to know that there are very few mining companies that solely mine silver – perhaps only two big companies. What this means is that by buying silver stocks you could be indirectly investing in the other metals that same company you hold stocks in is mining. Those other metals will vary widely depending on the country where the mine is located, however could include tin, copper or lead for example. This can have both positive and negative effects on your investment. You could be rewarded greatly for the increase in value of silver and/or one of the other metals being mined, or the decline of silver and/or one of the other metals being mined could see your stock prices plummet. As silver is a fairly stable investment it is likely that the other metals could dictate your investment. Ensure you have researched thoroughly into prices and investment patterns of all the other metals being mined by a company, before you buy silver stocks.
Investing is silver goes further back than most of us could imagine. And just as they did ‘back in the old days’ we can physically purchase silver as an investment. Silver coins and silver bars, or bullion are a good way to invest. Holding on to the silver for long periods of time will usually guarantee a decent return on your investment. This type of silver tends to be more of a family heirloom these days than has been handed down generation after generation. Often its value lies more in its sentimental value. The disadvantage for your average investor is that you must physically store the silver which is heavy and bulky. It is sensible to have the silver insured from theft especially if it is being stored at a residence. This obviously adds an additional and ongoing cost to your investment you would need to consider.
One of the newer ways to invest in silver is with an exchange traded fund, or ETF. Like gold ETF, biotech ETF and water ETF, these funds are all handled electronically therefore are easily bought and sold. With a silver exchange traded fund you are investing in the raw metal itself. However because the investment is electronic the physical silver is held in trust by the fund manager. One of the first and most popular silver exchange traded funds to market was iShares Silver Trust managed by Barclays Global Investors. An investment in this ETF would see you owning the specific right to an exact amount of the metal, in this case silver, which is measured in ounces. The investment is much easier to liquidate than if were you physically in possession of the silver, and likewise it is much easier and quicker to obtain further investment – without leaving your home!
So whether you are considering investing in silver stocks, silver coins, silver bullion or silver exchange traded funds it is considered a good investment to hedge against inflation. With uncertain economies any of these options would make an ideal addition to a good investment portfolio.