Silver, along with gold, has been used as a store of value and medium of exchange for millennia. But invest in silver and store it at home isn’t always the most convenient or cost-effective.
Here are five new ways you can invest in silver without the hassle and cost of keeping physical silver yourself.
1 – Commodity Exchange-Traded Funds
One of the simplest ways to invest in silver today is to buy shares in an exchange-traded fund (ETF) that stores silver, such as the iShares Silver Trust (SLV). These funds purchase silver kept in a vault in a bullion bank, keeping an amount on reserve proportionate to the number of shares purchased.
By investing in a silver ETF, you’ll gain all the investment benefits of silver exposure without having to handle the shipping, security, and storage of the silver yourself.
The main risks of investing in a silver ETF compared with physical silver have to do with worst-case scenarios. However, the management fees can also differ compared to the cost of storing the silver yourself. For other people, ETFs simply do not provide enough anonymity, steady investment gain, or speculative risk to be worth it and they choose other options for their silver investment.
2 – Silver Mining Stocks
Similar to purchasing an ETF, you can purchase shares in individual silver mines on a stock exchange and gain exposure to silver in that way. The main advantage to such an option is the steady profits provided of an actual business, which comes in the form of rising stock prices or higher dividend yields.
The main disadvantage to silver mining stocks is the risk that comes with investing in a particular company. While the company will likely gain or lose money with the price of silver, it might also do so due to its particular business practices and or mining prospects. A mining company can go under in a way the price of silver cannot.
In short, the investment upside potential is higher, but you’re also taking on much greater risk. Diversifying into many mining companies is one way to help lower that risk while still reaping the rewards.
3 – Silver-Backed Cryptocurrency
If you’re looking to buy silver online and keep it digital, an exciting option is to buy a silver-backed ‘stablecoin.’
A silver stablecoin is a type of cryptocurrency backed by real silver. There are a few options to choose from currently, such as SilverCoin, Silverlink token (LKNS), and SilverToken. All three can be exchanged for near-pure (99.9%) silver under certain conditions. You may never need to use this option yourself, but the fact that it’s an option helps to peg the cryptocurrency to the price of silver. That’s how stablecoins get their name, by being more stable than other forms of cryptocurrency.
Historically, there have been worries about losing one’s crypto and figuring out how to store it. But security and safety measures have come a long way in the last decade, with companies now offering very easy-to-use and highly secure online wallets to store your crypto in.
4 – Junk Silver
A slightly weirder option on this list, and not exactly new, buying junk silver has been a strategy when investing in silver for a long time.
Junk silver refers to pre-1965 American dimes, quarters, and half-dollars, which had 90% silver content. While they hold little value to coin collectors, their silver content has only gone up in value in the intervening years.
You can own this alternative form of silver as a way to possess a certain amount of the precious metal available to smelt on hand, but also can exchange the coins for their real USD value if the price of silver crashes. It’s an interesting proposition from that angle compared with just regular silver.
They are also generally easier to store than bars, look cool, and are part of an interesting history, if that kind of thing matters to you.
5 – Silver Futures
The riskiest way to invest in silver on this list, silver futures have also been around for a long time. However, recently they have grown in complexity and options.
The idea with a futures contract is to agree to buy or sell a given amount of silver for its current price in the future. If the price then goes up, the buyer gets a good deal as they get the silver for cheap. If the price goes down, the seller gains the difference.
There are now lots of additional options in what’s called the derivatives market if you are interested in various speculative plays on the price of silver. But be careful. You can lose a lot of money quickly depending on what you bet.
The Future of Silver
There are now more ways than ever to buy silver online and hold it your own way, whether that’s a physical supply, a digital currency backed by silver, or by investing in silver ETFs or mining stocks. It’s really up to you and your risk tolerance.
Now, what about trading in Gold?