Investing in silver is appealing. Typically, silver investment is buying bullion in large quantities of coin or bar. You invest in silver when you buy, trade, or produce the precious metal. The market demand determines the price of silver.
Compared to other precious metals, silver is hardly used in the production of other commodities. Long term investors, therefore, drive the average market price.
People invest in silver to ride out a bad market. That is, to secure wealth in an unstable period.
Why Should I Invest In Silver?
Silver is relatively cheaper than other rare metals like gold and diamond. As such, you can acquire more for less. Silver is ideal for low-level investors.
The silver market does not attract investors like gold. Stability is, therefore, a problem. As such, silver is more volatile than gold. Price swings upward and downward rapidly like a pendulum. Silver sold for $35 can be $65 or $15 in a week. It is hence an excellent option for active investors.
Nevertheless, silver is safer than stocks and papers in unstable times. This is because silver holds value for a long while.
Silver is a more liquid investment if compared to non-market options. Although selling at the desired price may be difficult, you still get more return than Treasury bonds allow.
How Can I Invest In Silver?
There are four popular ways to invest in silver. They are:
Direct purchase is the most popular way to invest in silver. This means buying silver metal in usually large quantities. You can purchase a bullion of silver to store value or instantly resell.
Bullion investment is remarkably simple. The investor owns his asset outright. He deals with no third-party or intermediary. He sells his asset whenever he chooses to. The market price is often all that matters.
Under this option, you handle storage, logistics, and insurance. Therefore, you are exposed to the full market’s volatility, but you enjoy maximum profits too.
Silver Futures and Options
Silver futures and options pay you for predicting the market. That is, you invest in the movement curve of the market. Whereas investing in bullion depends on the market value, silver futures do not. Positive changes in the market value reward you.
Silver ETFs (Exchange-Traded Fund)
Silver ETF option is done on the stock market. In contrast to the two ways mentioned above, third-party investors own ETFs. The performance of these underlying assets determines your profits.
A silver ETF tracks the average market price of silver metal. An ETF usually concerns a group of bullion or a particular quantity of silver.
Silver ETFs are the easiest way to invest in silver. Trading is online. Hence, you do not have to worry about logistics or storage.
Silver Production Funds and Stocks
This option involves owning shares or stocks in companies that mine, produce or distribute silver. Your profit does not depend solely on the market price. As a result, silver production funds and stocks are highly reliable and less volatile. There are, however, business liabilities and complications. This is a passive way to earn from silver.
Bottom Line—Should I Invest In Silver?
Invest moderately in silver. If rightly done, it provides your portfolio with steady, unfailing returns. Mutual funds and traditional stocks don’t offer this. Silver is also much more liquid than other forms of investment. Investing in silver should be done wisely. Do not put too much money in silver. It is highly volatile and unstable.