Should I Invest in Silver?

Evidence suggests that in 550 BC ancient eastern Mediterraneans minted the first silver coins. Later down the line in 269 BC, the Romans began to use silver within their standard coinage, and this meant throughout their vast empire.

Nowadays, people see silver as a safe-haven-type asset that holds its value. It’s also, of course, a prominent material that jewelry makers use to make all sorts of beautiful and precious jewelry items.

Yet, you might be asking yourself, should I invest in silver? It’s a good question to ask, as many of us know much more about gold investments rather than silver as a commodity. So, let’s now delve into the world of silver investing, and determine whether it’s right for you.

Should I Invest in Silver?

We categorize silver, much the same as many natural resources, as a commodity. This implies that its price swings in the reverse way of equities and bonds.

When the economy is hurting and the stock market tanks, investors often gravitate towards silver and other similar commodities. Silver may be a fantastic method to diversify a portfolio.

Another benefit of investing in silver is it hedges against inflation. It has an inherent value that fiat currencies lack since silver is a tangible asset. Plus, silver is a long-term investment that performs well when there are low-interest rates.

But you might be thinking are there any risks when buying silver? Well, the biggest danger is that manufacturers use it as an industrial metal to make things like medical devices and microcircuits. This implies that production cycles impact a portion of silver’s value, making it far more unpredictable than gold.

Yet, many investors take advantage of silver’s volatility. And, in the grand scheme of things, the volatility is hardly as worrying as other investment forms, such as shares in the stock markets.

Ways You Can Invest in Silver

Now we’ll take a look at some of the common ways you can invest in silver.

Each option may have its own specific risks and rewards. So, it’s down to you to figure out the way of investing that suits your needs best.

Bullion and Coins

Purchasing physical silver, whether in the form of bullion or coins, is a rewarding way of investing. Many people enjoy the collecting aspect of this method, which is especially true with silver coins.

In certain circumstances, it’s even rather simple to obtain. For example, pre-1964 U.S. coins contain around 90% silver, and you can buy them at the silver content’s current market value.

You can benefit from silver bullion and coins if the market price of silver increases. Yet, when you buy silver, you make money only through the price of silver rising.

The opposite is true if you invested in a business, for example, where you would have cash flow on top of any appreciation. Yet, of course, investing in a business has many inherent risks that you wouldn’t associate with silver investment.

One of the best ways to find good deals on silver bullion and coins is to check out your local precious metals dealer. Reputable metal dealers will even be able to give you solid investment tips on your precious metal purchases.

Silver Futures

When you purchase silver futures, you are placing a wager on the falling or the rising price of silver. One benefit of buying such futures is that you don’t have to hold any physical silver.

Another draw to this method of silver investment is that you often get loads of leverage of silver future contracts. In simple terms, this means you can put up a small amount of capital, yet gain a larger amount of investment in relative terms.

Silver Owning ETFs

You can purchase an exchange-traded fund (ETF) that holds actual silver if you don’t want to acquire physical silver yourself. ETFs are also a good choice if you prefer a lower-risk option than futures.

If indeed the price of silver rises, the ETF will reward you. And, unlike with physical silver, you’ll face fewer hazards, such as the potential for burglary. Bear in mind; the return on an ETF that holds real silver is equal to the return on silver’s market price minus the ETF’s expense ratio.

ETFs also have another benefit. You may sell your silver at market value, and the funds are quite liquid. As a result, you can sell your investments at the greatest possible price when the stock market is trading.

Silver Mining Stocks

You may also profit from a growing silver market by investing in the equities of silver mining businesses.

You may gain from owning silver mining shares in two ways. To begin with, if silver prices rise, so should the mining business’s earnings. In fact, if all other factors remain constant, silver miners’ earnings will climb faster than silver prices.

Second, the miner may gradually increase production, hence boosting earnings. That’s an additional technique to profit with silver, rather than just betting on the market price.

Although, a word of caution: When you purchase shares, you must conduct considerable research. The reason is to ensure that you are dealing with a high-quality firm with the potential to flourish.

Many mining companies are high-risk businesses, and some have never dug a hole in the earth, much less mined silver from there. Mining stocks can also be volatile since their earnings are dependent on the fluctuating price of silver.

Invest in Silver the Right Way

Should I invest in silver, and more specifically physical silver?

Well, if you know that your home is secure enough to keep precious metals, investing in physical silver is becoming ever more popular.

The reason is, if the markets plummet, you have physical assets that are likely to hold their value. But, by all means, why not spread your silver investments out with various methods?

Whatever you choose to do, good luck with your investment choices. Plus, if you wish to learn more about investing, check out our blog for more helpful tips.