Silver Investments

When it comes to investing in silver you have two options: “paper” silver or physical silver. We prefer the latter, and in this article we’ll tell you why.

Investing in Paper Silver

One form of “paper” silver that is popular among investors is mining companies. They buy shares in these companies and ride their luck, but it’s a risky form of speculation, and that’s not what the precious metal markets should be about. The same thing could be said about silver futures or silver options.

Exchange-traded funds (ETFs) constitute a practical means of investing in silver, but there is no actual ownership involved with such an investment. There is no guarantee, no real silver, and there is also a chance that the issuer of the certificate will default, costing you everything.

Also, many ETF issuers do not have sufficient silver reserves to provide physical delivery for all of their clients, should the need arise. Considering many of them guarantee delivery upon the client’s request, this seems like an underhanded tactic, like selling a street when you only own a house.

Investing in Physical Silver

If you store physical silver in your home or another safe place — providing it is outside of the banking system — there are no such risks. In this case it’s not about speculation, because you own the silver and when you buy more, you’re simply adding to it. Also, assuming you have stored it safely, there is no event (naked short-selling, bank default, government incompetence, stock market gyrations, inflation, financial crises) that can take your silver away from you.

Physical silver comes in two forms: silver coins and silver bars. Which one you choose is entirely down to preference. Some coins have an extra value attached to them as there are many collectors out there who focus on silver coins and are willing to pay big money for rare ones. However, many of these have a premium attached to them. If you want to invest in silver purely for precious metal content, your goal is to focus only on spot price, and finding the cheapest silver that you can.