Silver Investments Explained

Like gold, silver has been widely used and accepted as a currency for thousands of years. Nowadays, of course, rather than being used as money to exchange for goods and services, it is more widely accepted to be an asset for investment (as well as a metal used in industry). This is largely due to the fluctuating nature of the silver price making it less acceptable as a stable form of currency.

There are many ways to invest in silver, and it is an asset that has given investors opportunity for short-term gains and long-term growth. Before looking at the ways to invest in silver, it’s worth looking at some of the factors that make it such a good investment choice.

Low Interest Rates Hurt Savers

With the global economy lurching from one crisis to another governments and central banks have, been exercising an expansionary monetary policy. Interest rate shave been reduced to historic lows and held there. Indeed, in the United States, the Fed has indicated that it expects to keep rates near zero through 2013. Further, quantitative easing (QE) has been used in the US and Europe to try and stimulate economic growth. Essentially printing money, QE is inflationary and considered good for the price of gold and silver.

With inflation higher than savings rates, savers are suffering from a depreciating value of account balances when measured in purchasing power terms.

Governments Keep Borrowing

As well as printing money, governments have allowed their finances to career out of control. Budget deficits, and net borrowing levels, are higher now than at any time in history. Several of Europe’s nations have needed ‘bailing out’ as their economies have been unable to support their governments’ short- term spending and long-term debts.

Countries and continents are buckling under their debts, and this is causing uncertainty in markets and may lead to worse financial crises in the future.

Such a backdrop is good for assets such as silver, which is seen as a hedge against inflation and uncertainty, and a store of value for the future.

Supplies of Silver are Limited

Silver is a natural resource. Just like oil, gas, and gold, reserves are depleting. As more investors buy, these supplies will start failing, and/ or become more expensive to extract from the earth. Just like any commodity, when demand outstrips supply, prices rise.

How To Invest In Silver

Those who want to invest in silver can do so in a number of ways. Essentially, however, this boils down to buying physical or non-physical silver.

Physical Silver

Physical silver comes in many forms. Scrap silver – traditionally unwanted rings, bracelets, trinket boxes, anything made of silver with no real use – is readily purchased. More regularly purchased by investors are bars, or ingots, coins and rounds.

Silver Bars

Flat, easily stored, and available in a wide range of sizes to suit different investor, silver bars are easily purchased and sold. Price depends upon weight and purity of silver content.

Coins and Rounds

The value of a coin is measured not only by its weight, but also by other factors such as age, condition, and rarity. Many national and private mints produce coins on a regular basis, and some investors concentrate on ‘themes’, such as coins depicting wildlife scenes.

Coins are minted as legal tender, but rounds are not. Rounds are coin shaped, but without the factors that make coin collecting so popular (design, themes, rarity, etc). Their value is based solely upon weight and purity.

Visit our page on silver bullion and coins or learn how to sell silver.

Non-Physical Silver

Including shares of companies that make their profits from silver, non-physical silver gives investors indirect exposure to the price of silver.

Company Shares

Predominantly the shares of mining companies, investors should remember that such companies rarely mine for silver alone. Often, other minerals and metals are extracted at the same time as silver, so such companies actually offer a more diversified investment than physical silver.

Also, it is worth noting that the value of shares of such companies depend on a host of factors unrelated to the price of silver: costs, wages, taxes, and other outside influences all affect the value of such companies.

Exchange Traded Funds

With shares trading on stock exchanges, just like the shares of mining companies, ETF’s are investment funds that offer investors a quick and easy way to invest in underlying silver in a cost-effective way.

Visit our page on Silver ETFs

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Silver Certificates

Silver Certificates allow investors to hold rights to physical silver without the need to actually own it. There is no need to take physical delivery, or store bars or coins, and the underlying silver is held for the benefit of the holder.

Visit our page on Silver Certificates

Investment And Taxation

For investors, the return made is not simply the difference between purchase and sale price. All investors should be aware of the tax rules applying to their investments in their country. Taxes applicable might include VAT, or sales tax, capital gains taxes and income tax. Anyone buying silver as an investment should consider his individual tax position before doing so.


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Silver Investing | Silver Bullion And Coins | Junk Silver | Silver ETFs | Digital Silver | Silver Certificates | How To Sell Silver



Silver Investments Explained


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