The market for silver over the last 2 decades hasn’t been very stable. We are now in 2020, and many professionals think that actually, this precious metal is worth the investment. It is a good time to educate yourself and find out how to trade with silver correctly. Learning about this industry is fun, and it is the only way of knowing whether to pursue such a move.
The most straightforward approach to today’s topic of investing in silver is to leave you home and go purchase some of this precious metal. You could buy coins or bars in many different sizes and forms. They go from 1 ounce to 1,000. An advantage of this approach is its value track the market price of silver directly. It doesn’t come without some drawbacks, however.
As a start, you will have to pay a small premium to dealers when purchasing the bullion. Then when the time comes for selling it, you will have to discount it a bit. A long-term strategy of holding the precious metal for a long time solves those problems, but for the rest, it might be too expensive to accept. Another disadvantage you shouldn’t forget is the actual storing of the metal.
Buying silver ETFs
Exchange-traded funds that own silver are an appealing choice if you don’t want actually to own physical silver. Each share is a particular amount of precious metal. You still have some costs here coming from the shareholders. However, they are nothing to be scared about. Some people stay away from ETFs because they don’t like the idea of not actually awning silver. There could also be some discrepancies between the traded value and the actual one for the precious metal.
Another choice you have is purchasing shares of firms that mine this metal. Those tend to increase in value when the price of silver rises and vice versa. When the price of bullion goes up, tho stocks are sure to follow in bigger percentages. Here the problem lies with the fact that you are investing in the actual mining process too. There could be accidents, failed projects leading to a low value of the stocks. You can ensure some security by owning baskets of mining stocks.
The last option is going after shares of silver streaming firms. There are no operations here but only financial offers for miners and receival of interest for the product that comes out. Often these firms get a great deal for the silver they are buying by offering the partners a chance to receive some money back. The stock price here is connected to the value of silver, and it could change according to the deal quality.
The suitable investment for you
You’ll have first to figure out what your goals are. If you’d like great exposure to the metal as a commodity – purchase physical bullions or ETFs. Here it depends on the longevity of your strategy.
If you are one of the people who are after a return – mine or stream stocks, depending on how risk-averse you are. For mining, you have to consider the capital intensity and the fact that there is no need to pay dividends like you would with streaming.
The wise thing to do is to do your research beforehand and decide whether this would be something you would like to do. The firms with the biggest silver exposure would be a good choice and could bring you a lot of money if you are right.