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Is Buying Silver A Good Investment



Silver has a long-standing history of being a valid investment. For each investor, the answer may be different. For those looking for greater returns with higher risk exposure, silver may not be the best option. For those looking for a safer (not necessarily stable) investment with real-world applications and uses, silver may make sense."}},"@type": "Question","name": "Is It Better to Buy Silver Coins or Bars?","acceptedAnswer": "@type": "Answer","text": "Buying coins, bars, or bullion typically results in the same risks. Each must be physically stored to protect against losses or theft. This storage, especially in a safety deposit box, may result in maintenance charges. To a degree, owning silver coins may make it easier to sell silver as buyers may limit the quantity they wish to own.","@type": "Question","name": "Where Is the Best Place to Buy Silver?","acceptedAnswer": "@type": "Answer","text": "Each investor must address their own investment goals to answer this question. If investors simply want to capitalize on the changes in price of silver, an ETF or futures contract usually makes more sense. If an investor wants true ownership of silver with the greatest amount of control, coins or bullion makes the most sense."]}]}] Investing Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All Simulator Login / Portfolio Trade Research My Games Leaderboard Economy Government Policy Monetary Policy Fiscal Policy View All Personal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All News Markets Companies Earnings Economy Crypto Personal Finance Government View All Reviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All Academy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All TradeSearchSearchPlease fill out this field.SearchSearchPlease fill out this field.InvestingInvesting Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All SimulatorSimulator Login / Portfolio Trade Research My Games Leaderboard EconomyEconomy Government Policy Monetary Policy Fiscal Policy View All Personal FinancePersonal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All NewsNews Markets Companies Earnings Economy Crypto Personal Finance Government View All ReviewsReviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All AcademyAcademy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All Financial Terms Newsletter About Us Follow Us Facebook Instagram LinkedIn TikTok Twitter YouTube Table of ContentsExpandTable of ContentsHow to Buy SilverAdvantages of Buying SilverDisadvantages of Buying SilverBuying Silver FAQsThe Bottom LineCommoditiesMetalsThe Best Way to Buy SilverByAaron Levitt Full Bio Twitter Aaron Levitt is a member of the Society for Advancing Business Editing and Writing. He has 15+ years of experience as a financial journalist.Learn about our editorial policiesUpdated January 07, 2023Reviewed byJulius MansaDuring economic downturns or when a downturn is expected, many investors have taken comfort in owning precious metals. Designed to protect against inflation and ambiguity in the markets, this asset is often used to diversify against equities, reap benefits of a tangible good with use, and hedge against rising prices.




is buying silver a good investment


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Silver has a long-standing history of being a valid investment. For each investor, the answer may be different. For those looking for greater returns with higher risk exposure, silver may not be the best option. For those looking for a safer (not necessarily stable) investment with real-world applications and uses, silver may make sense.


Buying coins, bars, or bullion typically results in the same risks. Each must be physically stored to protect against losses or theft. This storage, especially in a safety deposit box, may result in maintenance charges. To a degree, owning silver coins may make it easier to sell silver as buyers may limit the quantity they wish to own.


Each investor must address their own investment goals to answer this question. If investors simply want to capitalize on the changes in price of silver, an ETF or futures contract usually makes more sense. If an investor wants true ownership of silver with the greatest amount of control, coins or bullion makes the most sense.


Silver isn't a traditional investment since it doesn't generate a product or service. Silver has value in and of itself, as both a precious and an industrial metal. But it's otherwise inert. It doesn't produce anything, generates cash flow, or provide a steady income.


Until the 1960s, the price of silver stayed below $1 per ounce. That was one of the basic reasons the U.S. government commonly minted silver coins. However, as silver began to rise in price, the U.S. government withdrew silver from American coinage under the Coinage Act of 1965.


At the beginning of 1970, the price of silver was $1.80. By 1980, the silver price peaked at $49.45 per ounce. This represents an incredible price increase of more than 2,700% in a decade. But in just five months more, the price plummeted to less than $11.


Ironically, silver regained that price level only 39 years later and again could not sustain it for long. Through the years, silver experiences periodic and dramatic increases that maintain its reputation as an investment.


The price of silver languished at around $5 per ounce from 1995 through the end of 2003. If you had held silver during that eight-year time frame, you would have had virtually no return on your money.


However, in 2004 silver began to turn upward, rising to close to $16 per ounce at the beginning of the financial crisis in 2007. But even with the onset of the crisis, the price fell by nearly 50% by the end of 2008.


Then it began the second major upturn in price that confirmed silver as a legitimate crisis investment. From a price level of less than $9 in late 2008, it reached nearly $50 per ounce in 2011. That's a return of more than 500% in the space of less than three years.


By the end of 2014, the price declined to the $16 range, even falling as low as $12 in early 2020. But in March 2020 (the early days of the COVID-19 pandemic), silver spiked once again up to nearly $30 per ounce.


Gold and silver are often used interchangeably since they have similar histories and price performance. Generally speaking, the prices of the two rise and fall in tandem. For that reason, it may not matter which you hold during a time of financial turbulence.


Traditionally, gold has been considered the more common investment metal, probably since it's still considered to be something of a monetary asset. After all, the major central banks of the world all hold substantial reserves of gold.


In recent decades, silver has become more of an industrial metal than a monetary one. The gold/silver ratio has traditionally been between 50-to-1 and 80-to-1 but grew to nearly 115-to-1 in early 2020.


There are multiple ways you can invest in silver. This includes purchasing the metal itself and taking possession of it. Or investing in paper assets connected to silver, such as stocks, funds, and even silver streaming companies.


Silver mutual funds invest primarily in the stock of companies that mine silver. It's not the equivalent of owning the metal itself, but rather participating in the industry that produces it. A silver mutual fund holds a portfolio of stocks in such companies. Those stocks generally parallel silver price levels. You can buy silver mutual funds through most stock brokers, like Merrill Edge.


A silver exchange-traded fund (ETF) is a way to hold silver bullion itself, except you do it through a fund. An example is the iShares Silver Trust (SLV). This fund generally traces the price of silver, largely because it holds the metal in the trust. You won't have direct ownership of the metal itself. Instead, you own shares of the ETF that owns the silver. You can purchase ETFs through most online brokers, including Ally Invest.


Exchange-traded notes (ETNs) are unsecured debt securities that track an underlying silver index. Unlike bonds, they don't pay interest. Instead, the price of the ETN fluctuates with the value of silver. ETNs trade on major exchanges, much like stocks. Since ETNs don't hold silver or even stock in silver mining companies, investing in securities is best for those more experienced in silver investing.


Be careful when buying silver coins! Many coin dealers will attempt to persuade you to buy numismatic silver coins, which are a different commodity entirely. While silver bullion coins are playing on the price of silver itself, numismatic coins get their value primarily from the rarity. 041b061a72


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