As silver is becoming an increasingly popular asset to include in investment portfolios, more and more different ways to own silver are becoming common. Silver can be bought physically, meaning you actually own the silver and can hold it in your hand; or it can be bought through units traded on a silver-specific stock exchange, where you do not physically have the silver but own it all the same.
Physical forms of silver include silver bullion bars and silver bullion coins, and even jewelry with high silver purity content. Other ways to own silver include paper accounts, exchange-traded funds, and futures. If you want to enter the precious metals scene by getting exposure to silver, note that each type of silver or silver-backed asset has its own advantages and limitations. Before you make a purchase, make sure it matches your investment objective. If you prefer investing in physical silver, be sure to view Silver.com who is an online retailer of bullion and coins.
Of all the precious metals to invest in- gold, silver, platinum, and palladium, silver is becoming an increasingly popular option, given its low entry point which makes it more accessible to a broader base of investors. Though the value of silver is not as high as gold, it performs well because it is in such high demand. If you’re debating an investment in silver, it is definitely one that can pay off nicely. Having decided to invest in silver, you might be wondering how to go about it. There are two broad ways of investing in silver- physical and paper silver.
Physical silver is just what it sounds like- investment in silver that you can touch, transport, and physically ship and receive. Silver bullion bars and silver bullion coins are among the more popular ways to invest. Bullion is available in increments of 1, 10, and 100 troy ounce weights. Bullion is held to strict standards, and must be at least 99.9% silver to be accepted as bullion.
Why should you choose to invest in physical silver? With silver bars and coins, you are easily able to access them at any time and don’t have to wait for any third party transactions to occur. Even on non-business days like the weekend, if the market price of silver is high and you decide you would like to sell, you can easily do so. If you are building a collection of silver coins, they are small enough to easily store in a strong lockbox in your house. For larger amounts of coins and any amount of silver bars, it is better to store them in a bank safety deposit box where they will remain secure.
Having silver in your hand is a real benefit to investing in silver in the physical form. It acts as an insurance of sorts to know that in case of a market collapse or any other crisis scenario; you have the security of real tangible silver. Wise investors choose to add precious metals to their investment portfolio to diversify. Different methods of investment protect their interests and prevent their money from being lost all at once. Similarly, in case your traditional stocks and bonds aren’t performing well and your silver is, if you have your silver in a physical form, you can access it that much easier.
If you choose to invest in silver bars, you are among many other investors who find that silver bullion bars are the best type of investment for silver. Silver bars are easily convertible into cash and readily accepted at almost any silver dealer. It is not difficult for you to find a fair price quote. Both online dealers and local dealers are respectable sources for buying silver bullion.
If you decide that silver coins are the better choice for you, you can buy them either new or second hand, in what is called a “junk silver” coin. Silver is relatively cheap to buy, so large amounts can be bought without cleaning out your savings. First time investors can find quality “junk silver” coins at lower prices and at lower risk to them.
There are a few potential additional costs to owning physical silver, but they are far outweighed by the advantages. If ordering online, you may need to pay for shipping and handling costs. You will also most likely want to invest in insurance and store your coins safely in either a storage facility or a bank.
Below we have full guides to each form of physical silver investment:
- Physical Silver Bars
- Physical Silver Coins
- Physical Silver Rounds
- Physical Junk Silver
- Physical Silver Grain
- Physical Numismatic Silver
“Paper” Silver and Silver-Backed Assets
Silver is a popular precious metal investment to make because it is readily available for purchase in large quantities, and it can be sold easily as well. While physical silver can be a great investment to make, there are many reasons why a person would consider expanding their silver investment into other types.
While silver bullion is a highly liquid investment, it is more of a long term investment. For most silver coins to be sold at a great profit, many years have to go by as you wait for the coins to increase in value. There are heavy costs as well, including annual insurance costs, and a special capital gains tax rate imposed by the Internal Revenue Service. For those who find silver bullion a hassle to maintain but still are interested in an investment in silver, there are other choices.
Paper silver investments are an alternative and equally viable option for you. These are called “paper” because you do not physically possess the silver you own and your asset may not be backed by actual silver metal. Silver paper investments include government issued silver certificates, silver savings accounts, silver exchange traded products, and silver futures options.
Advantages of paper silver investments are that you do not have the additional costs associated with holding silver bullion. If you own a small collection of silver coins, you have the option of keeping it at home in a locked strongbox; but if you own a larger collection or silver bars, it is safer to store it in a secured facility. Added to the fact that bullion may take years to turn a profit, you’re looking at many years of storage costs in addition to any insurance you need. Owning paper silver means you have just a single piece of paper to keep track of and are easily able to trade it if need be.
Silver certificates can be issued by governments stating that you own and are entitled to a certain amount of silver. At any time upon presenting the certificate, you can redeem your physical silver from usually a bank reserve where silver bullion bars are stored. There are no sales taxes on certificates and no storage costs at your expense, making this a popular form of paper silver.
Silver exchange traded product can be represented by exchange traded funds, closed end funds, and exchange traded notes. These track the price of silver along major stock exchanges and allow you to invest in silver without owning the physical silver. It is subject to daily fluctuations, and if the stock market plays right, you could potentially make a high return in a short amount of time.
In the United States, silver futures trade primarily on the Commodity Exchange of the New York Mercantile Exchange, COMEX. Futures are an agreement between two parties to trade on an agreed upon date in the future. This can be highly risky for a first time investment, as futures contract allow investors to leverage their capital into massive positions, but worth if it you are able to accurately predict the movement of silver prices.
Paper investments are most advantageous because they are lower priced than silver bullion bars or coins. You also don’t need to worry about the storage cost of physical silver, which can really add up if you’ve made a sizable investment. Paper silver is also more liquid, so if you find yourself needing to sell quickly, you have that option.
Below are full guides to each major form of paper silver investment:
There are many different ways to own silver- physical silver bullion bars and coins, paper accounts, exchange traded funds, and futures, among others. Regardless of which avenue you choose to make your investment in, it is important that you evaluate all options and find the one that is best suited for you. Diversifying your silver investment portfolio and owning more than one type of silver can really pay off.