How to Invest in Silver: What Options Do You Have?

by Josh Biggs in Finance on 20th August 2021

For the last 20 years, the silver market has been pretty volatile, with the bull market that ran between 2000 and 2010 ushering the pullback of the recent years. Now, industries making products such as smartphones and solar panels, among others, have emerged as new drivers of silver on the market. So, if you are new to the silver market and wondering how to invest in this revered metal, here are the main options. 

The Best Ways to Invest in Silver 

There are a number of ways that you can use to invest in silver, and we are going to look at the most common, buying silver bullions and coins, trading silver ETFs, and trading mining companies’ shares. 

Buying Real Silver Bullions 

Owning physical silver, be it a bullion or coin, is a psychologically satisfying method of investing in silver. See – you have possession of the silver and can use it as you wish. In some cases, this is pretty easy by working with a trusted dealer, such as GoldAvenue. Click here to place your order for silver bullions or coins. 

If the price of silver goes up because of the market forces of demand and supply, this is an excellent moment to sell and make a profit. Remember to ensure that you have a safe storage unit at home for the silver bullions or use a bank deposit box. If you prefer a bank deposit box or private depository, know that an additional fee will be required for safekeeping.  

Buy and Trade Silver ETFs

If you do not want to trade silver directly, it might be a good idea to consider silver exchange-traded funds (ETFs). They own actual silver bullions and are traded on the exchanges just like stocks. The lovely thing about investing in silver ETFs is that you can trade silver at the market price. Also, ETFs are very liquid, and you can easily sell them any day the stock market is open. 

Two main ETFs that own physical silver bars are Aberdeen Standard Physical Silver Shares ETF (SIVR) and iShares Silver Trist (SLV). Like stocks, it is important to start by learning how ETFs work and following the price shift on the market.  Again, you need to carefully evaluate the ETFs because they are not created equally. 

Trade Silver Mining Stocks 

Another indirect method of investing in silver is targeting the stocks of silver mining companies. When you buy the stock of these firms, it implies that you become one of the owners. This means that you get to benefit in two ways. 

One, you can trade the stocks of the companies on the exchanges and generate some revenue from the price shifts. To use this method, you will need to have an account with a stockbroker and a good strategy. For example, you might want to use the day trading method or swing trading on the selected stock. 

Second, you get to enjoy some dividends when the selected company makes some profit because you are the owner. Although this is a type of passive income, you do not have control over it. This means the amount you can make is dependent on factors that impact a business’s profitability, such as management, marketing, and product development.

Investing in silver is an excellent way to diversify your investment portfolio. Remember that no matter the method you opt to use for investing in silver, it is crucial to learn about it well and follow the price-performance on the market. If you opt to trade the stocks of the silver mining companies or ETFs, it will also be a good idea to review your strategy and make improvements where necessary regularly. 

Categories: Finance