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How to invest in silver

4 ways to shine up your portfolio with this industrious precious metal.

Charlie Barton
Charlie Barton

Updated

Fact checked
How to invest in silver

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While the metal’s purposes have changed throughout history, silver remains a valuable commodity with a strong demand in the market. Demand for precious metals generally increases in times of economic uncertainty. Before investing in this industrious metal, learn the strategies and risks of buying silver.

Unlike gold, silver has demand that extends beyond jewellery, coins and bars. Because it’s also the best conductor of electricity and boasts anti-bacterial properties, silver is also used heavily in batteries, solar panels, electronics, dentistry and medicine.

1. Buy silver ETFs

Rather than trust your money to the stock of one or two companies, exchange-traded funds — or ETFs — offer the chance to invest in a basket of assets.

Compared to other popular investment methods, ETFs are simple and accessible. You can buy or sell them like stocks, but the diverse range of assets within them means less vulnerability to market fluctuations.

Many ETFs are a safe option for newcomers to precious metals. The broad scope of different companies in silver ETFs means you can focus either on the metal itself, on silver miners — or on both.

Pros

  • A reliable option for investors that’s more resilient to market conditions.
  • Gain far-reaching access to silver assets at reasonable prices.

Cons

  • Because ETFs are a collection of assets, you lose some control that comes with investing in a single stock.

2. Purchase silver futures

Futures trading is much more advanced than stock and ETF trading, and in fact, there are many brokerage accounts that do not offer futures trading, so if you’re interested in trading silver futures, make sure you select a brokerage account that offers it.

When you invest in futures, you agree to buy stocks in a commodity at a set price, which you then receive some time in the future. The idea is that you end up buying stocks at a lower cost than prices would allow otherwise, but success heavily depends on market movements.

Their vulnerability to market volatility makes futures risky. Some luck and a strong understanding of the futures market can reap large returns, but you can also lose money if you’re new to investing. And if you don’t roll over your futures contract before it expires, you could be stuck purchasing actual silver.

Pros

  • Can yield solid rewards under the right conditions.
  • Gives you straight ownership over your stocks.

Cons

  • The wrong choices can result in the loss of a lot of money.
  • A futures contract expires, triggering additional obligations if you fail to roll it over first.
  • Not all brokerage accounts allow futures trading.

3. Purchase silver stocks

Investing in stocks is a well-known method for approaching the market.

Silver has many modern uses, which makes it a desirable asset in multiple industries that include solar energy and electronics — and a popular commodity for investment.

Pros

  • Variety of stocks to invest in online.
  • Control over your investment.
  • Enter and exit the market when you want.

Cons

  • Though safer than futures, metals can be especially volatile, including unpredictable price fluctuations.

4. Buy silver coins and bullion

While not as convenient as investing in silver stocks or ETFs, you can also invest in physical silver. Ranging from 1 ounce to 5 or more kilograms, coins or bullion can be purchased or sold on your own terms from a local dealer or online.

Despite gaining full control over the asset, physical silver is a longer-term investment. Unlike buying and selling stocks or ETFs, where the only cost is the price, there are three factors that go into the final amount you’ll pay for physical silver.

  • 1. Spot price: Like other investments, precious metal prices fluctuate all the time based on supply and demand.
  • 2. Markup: Like any retail product, when buying from a dealer, you’ll pay a markup on top of the actual cost for the silver.
  • 3. Premium: While some physical silver is pretty basic, certain products like coins also have additional value as collectables. The premium can reflect the age of the silver (older or rarer coins are worth more) or the minting authority .

Pros

  • Direct control over your asset.
  • Silver maintains its value well.

Cons

  • Can take time to find a buyer for your assets.
  • Involves physical storage, which invites a risk of fraud or theft.

    How much is silver worth today?

    Is silver a safe investment?

    Silver is a staple material for many modern industries, allowing you a number of routes for investing in it. But watch for inevitable risks:

    • Fluctuating prices. Valuable metals fluctuate in price over small periods of time, sometimes with no apparent cause.
    • Storage. Finding somewhere to store physical silver can be a hassle, and storing it with a broker comes with fees.
    • Fraud. It’s tempting to look for the lowest prices, but those prices could be too good to be true. When buying physical silver, trade with reputable dealers to avoid being fleeced.
    • Political and environmental events. Political and environmental issues can result in mining, refining and trading being more expensive for companies, causing price fluctuations.
    Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.

    Bottom line

    You can invest in silver through options available to most commodities, including the purchase of silver coins and bullion itself. But be wary of fraudulent dealers when purchasing physical silver, and understand the potential for market fluctuations before investing in futures.

    Not sure silver is the right shiny addition to your portfolio? Compare your investing options across trading platforms and commodities to find the best fit with your budget, goals and tolerance for risk.

    Frequently asked questions

    Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

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