What Is the Advantage of Investing in Silver?

Positive aspects of silver investing.

There are several ways to invest in silver. Investors can own silver bullion or coins, buy shares of a silver ETF or invest in the stock of silver mining companies. Silver, as a precious metal, is considered to be a hedge against inflation and a source of wealth if there are problems with the monetary system.

Real Asset

Silver is a real asset that will always have some value. The price moves up and down with market changes, but the value of silver will not go to zero. This is a significant advantage compared to paper assets like stocks and bonds, which can become worthless if the issuer goes bankrupt.

Can Start Small

Silver bullion bars can be purchased with one, five or 10 ounces of silver. Silver coins from the U.S. mint and other countries usually contain an ounce of pure silver. With silver at about $20 per ounce, an investor does not need a lot of money to buy some coins or bullion. This is an advantage over buying gold, which costs over $1,000 per ounce, and coins and bullion are much more expensive.

Good Supply and Demand Fundamentals

Silver is a metal with positive supply and demand fundamentals. The amount of silver used in production of jewelry, silverware and industrial uses is usually less than the amount of silver mined in a year. The difference comes from recycling and sales from existing silver stocks. As silver use increases, the amount of silver available cannot grow as fast, putting upward pressure on silver prices.

Different Investment Options

There are different ways to invest in silver that make the metal a better fit with an investors goals. Silver bullion and coins are for investors who worry about the financial system and want to have the metal to use as money. Silver ETFs make it easy for investor with a stock brokerage account to invest in the value of silver. Silver mining stocks are speculative investments for investors looking for a big score if a new source of silver is found or the price of silver takes off. Silver futures allow traders to profit in small price moves of silver in either direction.

References

• MoneyWeek: Its Time to Hoard Silver
• Silver Institute: Investment Options