Seven Ways To Invest In SilverSeven Ways To Invest In Silver

While gold has been the favorite precious metal for investments over the years, it's price has recently skyrocketed to more than $1400 per ounce and many would-be investors aren't able to afford physical gold. Silver's price has risen right along with gold's, but it remains well within reach of the smaller investor. Silver has the added advantage of having many industrial uses, so as the economy picks up again, silver will be even more in demand. Let's take a look at several ways you can choose to invest in silver.

Silver jewelry is usually made from Sterling silver, which is an alloy consisting of 92.5% silver and 7.5% other metals. Many other household items, such as candlesticks and flatware may also be made from sterling. The markup on these items usually prevents them from being considered as an investment, though you can sometimes find them used at close to melt value. Be aware that items like candlesticks and knife handles may only have a thin outer layer of sterling, so don't just throw it on a scale and pay as if it were solid silver. Silver plated items may look beautiful, but have almost no silver value, so pass on those if offered as valuable silver.

Silver coins offer a simple and inexpensive way to buy silver. There are a few things you should know before purchasing. First, silver coins can be made from a variety of silver alloys. Most of the United States silver coinage you will find is minted from 90% (.900) silver. But there are exceptions, such as the 1965-1970 Kennedy half dollars, which were only 40% silver. Also, the wartime nickels from 1942-45 were made from 35% silver. They still have value, but not as much as a regular 90% issue, so you have to adjust your buying prices. Always check to see what the silver content is before buying.

Foreign silver has an even wider range of silver content. For example, Canadian silver varied from .925 in the early days to .800 from 1937-1967. During 1967, the silver content was changed to .500 and that lasted through part of 1968 when silver was removed totally from circulating coinage. Since that time, only some Canadian collector coins are minted with silver.

Another popular way of investing is silver bullion bars or rounds. Various companies produce these in sizes from grams and ounces to kilograms and 100 ounce bars. Engelhard and Johnson Matthey are two of the oldest and most well-respected and well-known manufacturers. Other popular silver bullion producers are APMEX, Silvertowne and Wall Street Mint. Expect to pay a little more for the Engelhard and JM than for the others and of course, you will pay less of a premium for the larger bars than for the smaller ones. Many countries produce and sell both silver bullion coins and bars. The United States Silver American Eagle, Canada's Maple Leaf, China's Panda and the Australian Koala are just a few of these.

If you want to invest in silver, but don't want to bother with storage, there are a few possibilities available for you. If you have an account with a stockbroker, there are a couple of ways for you to make your investments. Shares of silver mining stocks are available directly on many stock exchanges. A few of the largest silver plays are Couer D'Alene (CDE), Hecla Mining (HL) and Silver Wheaton (SLW). There are many companies that trade on the Vancouver and Toronto stock Exchanges. While there are certainly some good shares to buy there, make sure you do your research first. Many of these are exploration companies which have not yet produced an ounce of silver. There may be good reasons for buying these, but they are more risky than the others already mentioned.

Exchange Traded Funds (ETF) are another way to invest in silver. Over the past few years, several have been created and they are not all created equal. Some, like iShares Silver ETF (SLV), invest in physical silver bullion. Some ETF's, like the Global X Silver Miners (SIL) invest in mining shares, while Proshares Ultra Silver (AGQ) seeks to match 200% of the move in silver prices using various financial instruments. The one thing all the ETF's have in common is they trade just like a stock and you can buy them from any stockbroker.

Silver Mutual Funds are still another way to invest in silver without physically holding it. Mutual funds don't trade like stocks. You can place your order at anytime during the day, but your order won't be completed until the end of the day when the fund price is calculated. Check before you invest...some mutual funds have charges either going in or when selling called "loads" which can be anywhere from 1% up to 5% or even more. Others are no load, make sure you know what you are buying.

Silver also trades on the futures markets and these offer a way of controlling a large amount of gold with a small down payment. You can put down as little as 10% of the contract value. You can make a lot of money when silver is going your way, but you can lose everything quickly if it goes against you. Futures are NOT for the average investor.

Most financial advisors recommend placing 5-10% of your investments into precious metals like gold and silver. Just make certain you are aware of the issues before committing your cash.
by Ken MacKenzie
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Ken is a successful writer and online entrepreneur. He has developed Gold & Silver Coin Investing as a portal for presenting articles, information, resources, news and links about investing in gold and silver.
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