The financial market is one big rollercoaster. It slowly goes up, it quickly comes crashing down, it spins, swirls and can often make you sick. Indeed, looking at the complete chart of the U.S. stock market throughout the ages it does look like a rollercoaster ride seen from the side. It’s hard to predict when the ride will go up and when it might come down. And one thing that keeps you safe is the lapbar.
In our case, this lapbar is investing in silver bullion.
Investing in silver coins or bullion, as well as other precious metals, you can be sure that whatever the ride may bring next your finances are fairly safe. By investing your assets in precious metals you can also end up with more money than you invested thanks to market corrections. You can learn more about it here.
However, many still don’t know that investing in silver can be lucrative or how to invest in silver in the first place. In this article, we are going to analyze the ways you can invest in silver so you can find the one that best fits your financial goals.
Real Silver
The most obvious way to invest in silver is to buy the actual physical metal. You can buy bullion silver either as coins or bars in all sizes and formats. You can find bullion coins in an ounce, and bars weighing up to 1000 ounces.
One advantage owning actual silver has over other methods listed in this article is that its value is directly related to the market price of silver. However, this method also has some drawbacks. You will have to pay a premium to obtain silver from a dealer and have to sell it at a reduced price if you decide to sell it back that is. If you plan on owning long-term than these prices are not that big of a loss, but if you trade frequently they can be a big expense.
There’s also the question of storing your silver bullion. Keeping all that silver in your home can take up a lot of space, not to mention many security risks. The most common option for owners is to store it in a bank or entrust it to a specialized private safe deposit owned by companies like Silver Bullion. Either way, there are some additional costs to storage and transportation you have to be aware of.
Silver ETFs
If you are looking to trade often, exchange-traded funds that own silver are a much easier solution. A share of silver EFT corresponds to a certain amount of silver and the prices closely follow the price of silver. But as with any other mutual fund, silver ETFs come with additional expenses charged to shareholders. However, these expenses are fairly modest compared to the additional costs of owning actual silver.
It’s also worth noting that owning a silver ETF does not mean you actually own any physical silver. Additionally, there are some price discrepancies as ETF shares can trade at a premium or a discount compared to the actual value of silver. Still, if you plan on trading, ETF shares give you direct insight into the movement of the silver market.
Owning Silver Mining Stocks
Another, less direct way of investing in silver is buying the shares of a silver mining company. The stocks usually increase when the price of silver goes up and vice versa. It’s not that uncommon for the prices to rise several times more when there’s an increase in price for silver bullion.
There is a catch though.
You will have to deal with all the risks of conducting the mining operation. For example, an accident at a mine can impact the performance of a company even if the price of silver is high. The worst part is that you can’t really do anything to prevent a mining accident that was not influenced by human error but rather natural causes like earthquakes or unstable mines.
Owning Shares of a Silver Streaming Company
Last but not least, if you don’t feel like risking your investments with a mining operation, you could buy shares of a silver streaming company. A silver streaming company does not run the mining operation but offers financing to mining companies with a royalty or a hefty interest in the operation.
Do you know what the best part is?
These companies can buy silver directly from their partners at a smaller market price, which gives them a chance to make a profit through this investment. Therefore, the stocks of these companies increase or decrease with the price of silver, but are also affected by the quality of financing options they offer.
Which Option to Choose?
Each of these investment options has their ups and downs, and which one you choose is largely up to you. If you want to see a sizeable return on your investment you should go with mining stocks or streaming stocks if you’re not up for the risks that come with a mining operation. If you want to buy silver as a commodity or to protect your assets from a financial crisis, silver bullion and ETFs are the best choices.
