Why You Should Invest In Silver And Silver Stock

By on December 15, 2012

Many people are turning to silver as the more affordable precious metal to include in an investment portfolio rather than gold.  Current market trends suggest the value and popularity of silver should increase over the next few years.  Many investors are starting to accept silver as a more sound investment.  But for the inexperienced investor, purchasing physical silver or silver stock can seem overwhelming.  The following tips will show you how you can get started with investing in silver today.

Purchase Silver Stock
The simplest way to buy and invest in silver is to purchase exchange-traded funds.  Some examples are iShares Silver Trust and ETFS Silver Trust.  The fund manager of these commodities will hold a certain amount of actual physical silver in place of each fund that is purchased, and will track the price of silver.  Many people will opt for this type of silver investment rather than an actual physical one because you don’t have to deal with the security and storage process of owning a precious metal.  The benefit is that you are essentially paying someone to store the silver for you.  The disadvantage is that you don’t actually have the silver in your possession.  Many people feel more comfortable with investments they can actually hold and care for themselves.  In that case, there is the option to purchase physical silver.

Purchase Physical Silver
When most investors purchase physical silver, they do so by buying bullion coins or silver bars.  Most people prefer coins either made by the Canadian or United States mint because they are often easier to sell than the silver bars.

The problem with purchasing physical silver is that many of the bars and coins are marked up over the actual cost.  So in order to own the liquid asset of physical silver, you may pay an average of 5% over cost on a silver bar, and up to 16% over cost on silver coins.  This is because the coins that are easier to trade and sell are more expensive to make.  So while purchasing stock in silver has its disadvantages, it also has the advantage of saving you a little bit of money.  Choosing the right type of investment for you is a process of weighing the pros and cons of both silver stock and physical silver against your own personal instincts and preferences.

Which To Choose?
If you are concerned about the collapse of the stock market, or feel more comfortable with a tangible proof of your investment, you may choose to purchase physical silver rather than stock.  Remember that when you purchase actual bars and coins, you will not only pay a little over cost for it, but you will also have the added cost and worry of storage and security, which are essential to owning any precious metal.  If you prefer to have someone else handle your investments, and don’t mind that you are unable to see and touch your investment, purchasing silver stock is probably the right choice for you.

No matter which option you choose, most investors will agree that silver is a sound investment and likely to increase in value over the next few years.  As governments print more and more money to get out of bad economic situations, precious metals become more and more valuable.

Great Southern Coins is a leading rare coin and precious metals firm recognized as one of the leading gold and silver coin dealers and one stop location for all your precious metal needs.

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