Silver has been a valuable commodity for hundreds of years — its purposes have changed a fair amount throughout history, but it’s never lost its place in the market. In part, this is due to its inherent malleability, allowing it to adapt to the changing times and keep its value high even today. We’ve put together four different ways to invest in silver, and the risks involved.
Investing in silver stocks is a well-known method for approaching the market. It’s possible to invest directly in the companies that mine for silver. Because these shares are so close to the commodity, the shares in them are likely to correlate a fair amount with the price of silver.
Silver has a number of uses which make it a desirable asset in many modern industries. Its popularity makes it an easy commodity to invest in, with many companies offering their stock and a number of brokers and advisors willing to sell them.
Here are some mining companies you can invest in:
Fortuna Silver Mines is a Canadian metals mining company. It has 4 operating mines:
Silvercorp Metals is a Canadian mining company. It owns 4 silver, lead and zinc mines in the Ying Mining District.
It also owns 2 floatation mills in the Ying Mining District. One with a capacity of 1,000 tonnes per day and another with a capacity of 2,200 tpd, giving the Ying Mining District a milling capacity of 3,200 tpd.
Pan American Silver Corporation is a mining company that operates in Latin America and is based in Canada. It has 6 operating mines:
Buy Pan American Silver shares
Compare brokers to buy silver stocks and shares
Exchange-traded funds are a similar option, but they allow you to purchase a basket of assets in one transaction. These are already diversified to a certain degree, (although you should still ensure not to put all of your money into one ETF. ETFs are traded on stock exchanges, so they’re as easy to access as shares.
Compared to other popular investment methods, ETFs are simpler and more accessible. ETFs can be bought and sold in a similar way to stocks but remain less vulnerable to market fluctuations due to the diverse range of assets that form them. ETFs are perhaps the best choice for newcomers looking to start investing in silver; there are a number of ETFs to choose from representing a scope of different companies.
Compare brokers to buy silver ETFs
Futures and options contracts can be traded on contracts for difference (CFD) platforms. Futures let you buy stocks in a commodity at a set price, which you will then receive some time in the future. The idea is that you end up buying stocks at a lower price than they would otherwise be, but this is heavily dependent on market movements. Options contracts are similar, but give you the option to purchase stocks or commodities at a set price by a certain future date, but you’re not obliged to do so.
As they are vulnerable to market volatility, futures and options are riskier than typical stock purchases. Some luck and a good knowledge of the market futures can bring you large returns, but on the other hand you may make a loss. If you’re new to investing you might want to learn the ropes first before considering futures.
Compare brokers to buy silver contracts
Rather than investing in silver stocks, you may decide to invest in physical silver. Ranging from an ounce to five or more kilograms, you can choose to buy coins or bullion to sell on your own terms.
While you have full control over the asset, buying physical silver is a longer-term investment. Depending on the amount you buy you could be waiting some time to sell it. Like other investments, physical silver prices are still influenced by the market.
A similar alternative is to invest in the commodity through a trading platform – you don’t ever actually see the silver, but you’ll own it and it’ll be stored on your behalf. This comes at a cost, but could be worthwhile if you want to invest in a lot of silver.
Here’s a graph with some of the latest silver prices.
As mentioned above, silver is a staple material for many modern industries and there are a number of routes available for investing in it. However, regardless of which way you approach it, your investment will inevitably come with risks:
60% of people we surveyed said they already invest in silver stocks or would consider investing in silver stocks.
| Response | |
|---|---|
| I would consider it | 53.14% |
| Not sure | 24.35% |
| I wouldn't consider it | 15.31% |
| I already invest in this | 7.2% |
To make comparing even easier we came up with the Finder Score. Costs, features, ease and range of investments across 30+ platforms are all weighted and scaled to produce a score out of 10. The higher the score the better the platform – simple.
Read the full methodologyAll investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
Investors tend to see silver as a safe haven investment, but safe haven doesn’t mean “safe”. You need to ensure that you still diversify your portfolio. Consider what your options are and ensure you’re aware of the risks involved in investing in this commodity, such as whether you’ll need to store any physical silver and the costs associated with it.
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