If you don't want to directly own physical silver, but you also want a lower risk method than futures, you can buy an exchange-traded fund (ETF) that owns physical silver. You'll have the potential reward for having silver if the price goes up, but you'll run fewer risks, such as theft. The clearest way to invest in silver is to go out and buy the physical metal. Silver bullion is available in coin and ingot form, and most coin and precious metal dealers offer silver ingots in various sizes and formats.
You can usually find coins and ingots as small as an ounce, or large ingots up to 1,000 ounces. Some of the best silver mining stocks are First Majestic Silver Corp (AG), Pan American Silver Corp (PAAS) and MAG Silver Corp. Silver is highly speculative and generally only rises when traditional investments, such as stocks and bonds, fall. Or invest in silver-related paper assets, such as stocks, funds and even silver transmission companies.
For this reason, ETF investors sometimes lose profits because the fund is unable to move precisely with the underlying commodity, which is called a tracking error. Other precious metals, such as rhodium, are only now becoming increasingly accessible to ordinary investors in physical form. Instead of relying on a single stock, you can also invest in an exchange-traded fund (ETF) or an investment fund that groups together several silver-related assets. In fact, many people who want to invest in silver probably remember using silver coins in everyday trading decades ago.
By understanding how you can invest in silver, you'll be in the best possible position to decide if it's the right move for you. When there is instability in the economy and financial markets, precious metals usually function as the best alternative investment and thrive when other investments become unstable and decline. The form of silver in which to invest depends on your own desire for convenience and appreciation, and on your tolerance for risk. You may also need to act more quickly when buying or selling gold, platinum or palladium to optimize the best return on investment in the long term.
During economic downturns or when a recession is expected, many investors have been comforted to own precious metals. That said, investors shouldn't so quickly ignore the benefits of owning physical silver bars. If the technology industry starts to lag behind, silver prices will fall, affecting your pocketbook, whether you invest in physical metal, in shares of a silver streaming company, or anything else in between. You can buy silver shares just like you would with stocks from any company, through a brokerage agency, investment application, or online trading platform.
Savvy investors tend to leave the comfort zone of investing in paper, stocks, bonds and conventional funds and jump into more exotic and harder assets, such as silver.