Is Silver A Good Investment - Hero

By the time of writing this article, silver was trading at 14.18 with a spread margin of 0.1 (-0.42%) against gold’s 1,201.40 at spread margin of 1.00 (-4.70%).


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For thousands of years, silver has maintained a positive market demand as an investment, currency and store of value. Silver’s market demand is still dominated by bullion coins, industrial products and jewelry. This precious metal also features in the stocks exchange as a traded product.

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Silver price in the stock market is mostly based on speculation. Supply and demand are the main causes of silver price changes and thus when compared to gold, silver is rather volatile.

So, Is Silver A Good Investment?

silver

Silver lists among the most traded precious metals. This commodity is a store of value, a way to counter inflation hedge and an added advantage towards protecting against other financial and economic crises.

Silver has an edge as an investment tool. The following are some of the contributing factors that enable silver as an investment to stand out.

  • The element property of silver adds value by giving it more industrial applications
  • It’s been in existence for thousands of years as a currency and medium of exchange
  • The supply and demand categories for silver contribute to its unique characteristics

There is a higher industrial demand for silver when compared to its biggest competitor, gold. Increased demand may categorize silver a risky investment due to possible economic slowdowns.

However, experts have indicated that industrial applications are increasing at a very high rate. This means that the susceptibility of a sluggish market will not cause negative effects on the commodity.

As a product that has been available over a period of more than 4 millennia, investment demand is still sky rocketing. New uses for silver are identified almost every day.

But this is not the case with supply; production companies are therefore facing serious challenges as they try to satisfy growing market volumes.

How to Invest in Silver

There are a few different ways to invest in Silver. Below, i’ll discuss the 2 most popular.

1. Buy physical Silver bars or coins

The good ole days of buying silver bars and coins are still alive and well. Of course, there are some advantages and disadvantages to buying physical sliver.

Some Advantages:

  • It’s easy – You can buy Sliver just like you would buy any other physical good online. In fact, you can even now buy it on Amazon
  • Peace of mind – You can go to bed easy knowing exactly where your Silver is stored. You don’t have to worry about technology meltdowns or outages.
  • It’s “cool” and impressive – It’s definitely cool to own physical Silver bars. It’s empowering to hold it in your hand and it’s also a topic that people find interesting to talk about.

Some Disadvantages:

  • It’s more costly – There are additional costs to buying physical silver. Firstly, there is the cost of shipping. Secondly, the cost to store it. Even if you’re storing in your house, you should buy a safe. Finally, the cost of insurance. Just like anything else valuable in your home; it should be insured against theft.
  • Possibility of theft – As mentioned above when you buy physical silver, there is a chance it gets stolen or misplaced.
  • It takes up valuable storage space – Granted, this may not be a big problem for most people. But if you’re keeping it in your home, you still have to find somewhere to store it. That’s less place available for your shoe collection!

2. You can buy a silver ETF

The rise of exchange traded fund (ETF) has played a key role towards investors who want to start trading precious metals. It is now possible to own physical silver bullions, futures contracts among other techniques.

In case you’re not familiar with ETFs….

Is silver a good investment? This is a question that has culminated to a heated debate. A common retail investor can now own silver funds through iShares Silver Trust, a stock traded as SLV on NYSE.

Expert reviews have indicated the volatility nature exhibited by silver makes ETF’s better than physical bullions.

Another dictating factor for traders investing on silver is cost. Bullions may incur extra charges, mostly between 10-20 (%) commissions on silver coins. The same percentage may also apply on bullions. This percentage has not reflected on safety deposit boxes where a monthly charge is applicable to help secure and insure the safety of your bullions or coins.

How much is Silver Worth?

In most cases, young investors on silver will be disinterested in owning physical coins and bullions. Precious metals are chosen for insurance purposes. ETFs as an option to invest on these metals may seem a lot easier and securer.

Therefore the best silver to buy largely depends on underlying objectives of the investor, to either trade or make quick money or for long term reasons.

The below table represents spot prices for silver on 22/9/2016 and the change column showcases how much each ounce, gram or kilo was worth on that day.

Silver Spot Prices Today Change
Silver price per ounce $14.18 -0.01
Silver price per gram $0.46 0.00
Silver price per kilo $455.90 -0.32

Best Silver to Buy

If you anticipate that the financial markets could come crashing down any time soon, the best silver to buy would be the physical form, bullions and coins. However, if your objective is to make some quick cash by calculating the daily spread changes, and anticipating the next trade, then perhaps investing on ETF’s would be the best way to go. There are three major categories of ETFs.

  1. a) iShares Silver Trust (SLV)
  2. b) Physical Silver Trust (SIVR)
  3. c) PowerShares DB Silver Fund (DBS)

Experts have noted that SLV and SIVR are recommended ETFs for investors who prefer to match independent prices for silver without necessarily owning bullions or coins. DBS on the other hand is suitable for investors who long to access futures movements on silver prices. Silver is a store of value when traded as jewelry.

Why Invest in Silver

Investing in silver coins and bullions is a favorable way to hedge against inflation and other financial market changes.

For example, investors would rather look at silver and other alternatives if the stock market has not been performing well. This is however the opposite if the stock market had been showcasing exemplary performances.

Bottom Line

Investors entering the silver market for the first time may find themselves divided especially on the preferred category to choose. Silver can be invested in its physical nature or as an exchange traded fund (ETF).

Either of the categories is an acceptable option and the end results are dictated by the investor’s interests either to make fast cash or hold an insurance against stock market changes.

To find Silver ETF’s to invest in using a stock screener can be a HUGE help. Our partner FinViz has worked well for many of our users. Check out our latest review on FinViz here!

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15 COMMENTS

  1. Silver is part of the precious metals asset class and can act as a hedge against inflation and a portfolio diversification technique to mitigate geopolitical,
    Silver is more affordable than gold, and investors in silver can accumulate more silver than gold, dollar for dollar.
    Psychologically, this makes the purchase of silver more achievable for small investors since $1,000 can buy up to 50 ounces of silver but not even one ounce of gold.

    “In sum, for the week silver rose 2.9% or $0.49 cents to close at $17.41 as of the final trade on the New York COMEX futures market.”
    http://bullionexchanges.com/blog/2017/03/20/fed-rate-hike-results-in-successful-silver-retest/

  2. Silver is part of the precious metals asset class and can act as a hedge against inflation and a portfolio diversification technique to mitigate geopolitical,
    Silver is more affordable than gold, and investors in silver can accumulate more silver than gold, dollar for dollar.
    Psychologically, this makes the purchase of silver more achievable for small investors since $1,000 can buy up to 50 ounces of silver but not even one ounce of gold.

    “In sum, for the week silver rose 2.9% or $0.49 cents to close at $17.41 as of the final trade on the New York COMEX futures market.”
    http://bullionexchanges.com/blog/2017/03/20/fed-rate-hike-results-in-successful-silver-retest/

  3. Silver is part of the precious metals asset class, and can act as a hedge against inflation and a portfolio diversification technique to mitigate geopolitical,
    Silver is more affordable than gold, and investors in silver can accumulate more silver than gold, dollar for dollar.
    Psychologically, this makes the purchase of silver more achievable for small investors since $1,000 can buy up to 50 ounces of silver but not even one ounce of gold

  4. I’ve been investing in silver for a while!!it has gone up and down like everything else!!but I feel secure having silver saved in my safe box!!there is nothing like having something physical safe and saved silver will eventually explode with all the new technology and I uses being found for it! Go silver!!

  5. Many people are aware that silver is one of the most in-demand precious metals in the world. Silver is a very common precious metal that is used to make jewelry, utensils, computers, vehicles, industrial metals and so on. It is one of the commonly traded precious metals in the commodity market, like gold. This blog will help the investors to invest in silver best ways.

  6. As of today the 25 August 2018 silver is at $14.77 US, $20.17 CND it’s great time to purchase. Economic collapse is due,whatever you do don’t put in the bank,dig hole let it sit.

  7. Thanks for helping me understand that silver coins can be used in its physical nature or the ETF. With that in mind, I will be choosing this kind of investment. Actually, my best friend is also interested in this that is why I am researching well.

  8. The only advantage of turning your paper money into silver is one can not catch on fire and be lost BUT don’t ever expect to make ANY money investing in silver since it only goes up pennies per ounce and loss dollars per ounce.
    Coins are even worse than bars since you pay extra for the “Uncirculated brilliant” and that means you better not ever touch them with your hands and when you get them they better ALL be as perfect as possible and buying the ones that are given even higher ratings cost insane amounts and the only one making a profit would be you great-grandkids when they are old.

    Just look at the last 10 years of the value of bars and coins and you see that if there is any rise in value it is the rise of the sellers price and not that you could sell your silver for a profit.

    As far as storage……well if you buy it you should not live in a place where you have to buy a safe or insurance unless you want to lose even more money and you will never have so much silver or gold that you can’t figure out a place to stash it in your house (no not next to the wood stove or fireplace)

    BUT if you want to buy my 100 oz bar or 100 oz’s of uncirculated coins then you can buy all of it for $5000 with free shipping.

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