Home Money 10 Ways to Invest in Silver

10 Ways to Invest in Silver

by Jeremy Holcombe

In 2011, the price of silver peaked at $49.82 an ounce. In 2015, the metal traded at approximately 70% below that level. When an investment starts to fail with the majority, most often it is the right time to do your due diligence and consider buying. In such a case, researching on how best to invest in silver would be one of the ways to do so. There are a variety of different ways to make an investment in precious metals. Although the price plays an important role, your returns can be significantly impacted by how you choose to invest in it.

Silver Coins and Futures Contracts

Buying silver coins from the US Mint is one of the long-standing and surest ways to invest in silver. They are available for purchase through a dealer or from the Mint.  Silver coins can be accessed easily but it is the transport hassle and storing costs that do not make it the simplest option.

If you are adventurous and have extra cash, you may want to explore the commodity futures market. The COMEX too, which is run by the CME Group of Chicago, also trades silver. The large contract size makes small price changes equate to substantial gains or losses. Due to this, brokers require silver traders to maintain significant balances in accounts in case large swings in prices do occur.

5 Gram Silver Bars

A 5 gram silver bar may sound like it is really small, but it is vital for a balanced silver portfolio to have smaller quantities of silver. These .999 fine silver bars weigh in at just 5 grams and are quite useful for bartering. They do away with the necessity to break apart a larger chunk of silver. These smaller silver bars are known for their value and you can use them easily for an assortment of trades for smaller items.

Silver Exchange-Traded Funds

If you are looking for easy and fool proof methods to put your money into buying silver, you can use ETFs to your advantage. ETFs are similar to mutual funds and they provide investors with the opportunity to own passive funds that follow an index, a themed portfolio of stocks or exposure to a precious metal like silver.

The most popular physical silver ETFs are:

  • ETFs Physical Silver
  • iShares Silver Trust

Both of these are heavily traded ETFs. It is important to have higher trading volume, because with greater volumes, buyers and sellers can receive a fair price and limit huge price swings that are a result of a lack of a competitive bidding process. You can also look at ETFs that track silver miner performance. The Global X Silver Miners ETF or (NYSEArca/SIL) is a very well-known name in the silver-mining ETF domain.

Silver Stocks

When looking to invest in silver stocks, you should look for low-cost producers who have plenty of cash on hand to be able to weather downturns. The location of mines, production growth and the amount of silver reserves is also important. Pan American Silver Corp. (NASDAQ/PAAS) and First Majestic Silver Corp. (NYSE/AG) are two big names that have the matching characteristics.

If you are looking to explore an investment in silver that is tamer, then you should consider a silver royalty company, like Silver Wheaton Corp. (NYSE/SLW).

Silver Streaming Companies

If you are looking for big returns when silver price moves to the upside, your best would be silver mining and royalties companies, also known as silver streaming companies. However, you should keep in mind that compared to the number of gold miners that exist, the number of silver mining companies is limited.

Junk Silver Quarter Coins

Junk silver coins are also referred to as “90 percent silver” or “Constitutional Silver” in the silver market. They are US Quarter coins that are commonly circulated and bear dates of 1964 and earlier. These coins are heavily sought after because of the silver they contain. Prior to 1965, coinage in the US was made up of 90 percent silver. You will instantly recognize these smaller increments of silver because they are the same familiar US Quarter design. Generally, junk silver is sold at very low premiums over the current silver spot price, and they are a fantastic bartering currency.

Junk Silver Dimes

Junk Silver Dimes have the same attributes as quarters, but in smaller units. You will find that having these silver dimes is helpful as you can barter for what you need in the exact amount without breaking up your larger silver units. You can purchase junk silver in a variety of ways, from simple coin rolls to full bag that have face values of up to $1,000 USD.

Morgan Silver Dollars

While these are coins no longer in circulation, there is 90% silver in Morgan Silver Dollars, and you can usually buy them for a small premium over the silver spot price. You can sell them on an individual basis, or in full bags, and in tubes of twenty. While many of the printed dates in the silver rich Morgan series are quite common and easy to lay your hands upon, there are certain rare editions, and this is why they derive added value from the silver coin collectors market.

100 Troy Ounce Silver Bars

Though the looks of a 100 troy ounce silver bar may not be the most glamorous, they should definitely be a part of every silver investor’s portfolio. Since lower premiums are typically offered by bullion dealers when buying silver in larger volumes, you can have these silver bars at some of the lowest premiums above the spot price.

The American Silver Eagle

The American Silver Eagle has consistently been the top-selling investment-grade silver bullion coin since its introduction to the bullion markets in 1986. Containing .999-fine silver and weighing 1 troy ounce, this coin is fully approved for IRA accounts. The fact that it is familiar and trustworthy is what makes this US Mint coin a highly liquid asset.

With the US Mint producing record amounts, the Silver Eagle’s demand has soared in recent years. This has resulted in higher premiums for Silver Eagles than those found on other silver bullion coins. However, the standard in the market for silver is the American Silver Eagle.

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