While this metal’s purpose has changed throughout history, silver remains a valuable commodity with a strong demand in the market. Unlike gold, silver has demand that extends beyond jewelry, coins and bars or acting as an inflation hedge. Because it’s the best conductor of electricity and boasts anti-bacterial properties, silver is also used heavily in batteries, solar panels, electronics, dentistry and medicine.
There are four main ways to invest in silver. Each gives you exposure to silver in different ways, meaning each has unique benefits and drawbacks.
- Silver stocks
- Physical silver coins
- Silver ETFs
- Silver futures
Investing in silver at a glance
- Silver is seen as a safe haven asset during periods of economic uncertainty, as it’s uncorrelated to stocks, and its value tends to increase when the dollar’s value drops.
- Physical silver, silver stocks, silver exchange-traded funds (ETFs) and silver futures are four ways to invest in silver.
- Silver stocks, ETFs and futures are more convenient and economical investment options than buying and storing physical silver.
1. Buy 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.
Many silver mining and manufacturing companies, like First Majestic Silver (AG) and Wheaton Precious Metals (WPM), offer stock for purchase through online brokerage platforms and advisers.
- Choose from stocks of silver mining companies and royalty and streaming companies
- Control over your investment
- Enter and exit the market when you want with no requirements to hold physical silver
- Though safer than futures, metals can be especially volatile, including unpredictable price fluctuations
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2. Buy physical silver coins
While not as convenient as investing in silver stocks or ETFs, you can add silver to your portfolio by purchasing and storing physical silver, often considered a long-term investment.
Typically ranging from one ounce to five or more kilograms, you can buy or sell coins or bullion on your own terms via a local dealer or online. Retirement-minded investors may consider a self-directed IRA for investing in physical silver. These IRAs let you invest in precious metals for retirement and benefit from the tax advantages of an IRA.
Unlike buying and selling stocks or ETFs, where the only cost is the price, three factors go into the final amount you’ll pay for physical silver.
- Spot price: Like other investments, precious metal prices fluctuate constantly based on supply and demand.
- Markup: When buying from a dealer, you’ll pay a markup on top of the silver’s actual cost.
- Premium: Premiums can reflect the silver’s age or the minting authority (American coins have higher premiums than some other countries’ silver coins).
For investors looking to own silver at the lowest cost, junk silver generally comes with the smallest premium. Junk silver is the name for the US dollar, half-dollar, quarter, dime and nickel coins that were minted in 1964 or earlier. The silver content of these coins is typically 90%. Common junk silver coins include the Roosevelt dimes, Washington quarters, Franklin half-dollars and Peace dollars.
- Direct control over your asset
- Silver maintains its value well
- Can take time to find a buyer for your assets
- Involves storing, which invites a risk of fraud or theft
3. Buy silver ETFs
Rather than trust your money to the stock of one or two companies, 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, silver miners — or both. The iShares Silver Trust (SLV), for example, tracks the spot price of silver by owning physical silver bullion, while the Global X Silver Miners ETF (SIL) tracks an index of silver mining companies.
- A reliable option for investors that’s more resilient to market conditions
- Gain far-reaching access to silver assets through a single investment
- Because ETFs are a collection of assets, you lose some control that comes with investing in a single stock
4. Buy silver futures
Futures trading is much more advanced than stock and ETF trading, and in fact, many brokerage accounts 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 buy 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.
- Can yield solid rewards under the right conditions
- Gives you straight ownership over your stocks
- 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
Is silver a good investment?
Demand for precious metals generally increases during economic uncertainty, often correlating with a decrease in the US dollar’s value. According to the Silver Institute, silver’s global demand reached a record high of 1.242 billion ounces in 2022.
Industrial demand, silver jewelry fabrication, silverware, physical investment and hedging demand all rose in 2022, likely driving up silver prices with it. Silver’s value climbed 32.4% between September 27, 2022, to July 14, 2023, as the US dollar’s value fell 12.44% over the same period. In 2023 and over the short term, the Silver Institute sees this demand continuing to climb.
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 short periods, sometimes without 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 they could be too good to be true. When buying physical silver, trade with reputable dealers to avoid being fleeced.
- Political and environmental events. Mining, refining and trading depend on often politicized resourcing and ownership, which threaten to drive up the cost for companies.
How much is silver worth today?
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.
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