The Beginner’s Guide To Investing in Physical Silver
Learning how to invest in silver can seem intimidating at first. Even if you invest in mutual funds, stocks, and other assets. Precious metals work a little differently. We work hard to make learning to buy silver as straightforward as possible.
The following primer should help you feel more comfortable about investing in silver. Luckily, silver doesn’t have a high price, so you can purchase it with little risk. The more comfortable you become, the more opportunities you will discover to grow your wealth.
Silver Investment Benefits You
There are many ways to invest your hard-earned money. Did you know that you can pay a professional to make investment decisions for you?
Silver lowers the risk of portfolios that include volatile stock
Silver has a higher volatility than gold, but it can still play a critical role in offsetting risk in your investment portfolio. The price of silver might fall for a while, but it will recover. You cannot say the same of company stocks that lose their value.
Despite what some people believe, no company lacks risk. Consider the case of Enron. At one time, Wall Street analysts thought the company’s value could only climb higher. When investigators found evidence of fraud, the stock price fell from over $90 to $0.26. People lost millions of dollars because of the company’s downfall—luckily many of them were able to recoup much of that money through litigation.
Compared to stocks, silver looks like one of the safest ways to invest your money. When you have the physical product in your hand, you know that you will always have something valuable. There is a reason precious metals, such as silver and gold, are referred to as safe-haven assets.
Silver will always retain value because it serves a functional role
Why can you always expect silver to have some value? Historically, people have cherished silver for its beauty. Today, silver’s applications in many different industries and sectors play a greater role in determining its price.
Nearly all of today’s electrical devices include a small amount of silver. You can find silver in electrical outlets, smartphones, computers, cars, and solar panels. If the item has a circuit board, it most likely will contain silver.
Companies use silver because of its durability and high electrical conductivity. Silver is all around you. Unless someone finds a material that can replace silver’s usefulness, you can expect the metal to retain its value. It’s industrial applications have grown considerably over the last few decades.
You can transport silver easily
Precious metals are some of the best commodities to buy because you can transport and store them easily. Imagine investing in crude oil. You cannot maintain physical possession of the commodity unless you have a large warehouse or tanker for storage.
Knowing how to buy silver also gives you an advantage over investors who buy commodities that consumers must use quickly. You can store silver for as long as you want. You can pass it on from generation to generation.
Summary of silver investing benefits
The benefits of investing in silver include:
- Adding stability to your investment portfolio.
- Silver is an important metal that will retain its value.
- It’s relatively easy to keep physical silver.
- There will always be a market for buying silver.
How to Invest in Silver
If you ask an investment advisor, they will probably tell you about four ways to invest in silver. Not all of them include purchasing physical silver bullion. Still, you should know your options to make sure you choose an investment that makes you feel comfortable.
Silver futures and options
Futures investing can get complicated quickly, so let’s start with a pretty simple definition. When you get involved in a silver futures contract, you agree to buy or sell the commodity when its trading value reaches a specific price.
It’s not a terrible option because you can make money quickly. For example, you can agree to buy 1,000 silver futures when the price reaches $20 and sell them when the price goes about $25. Minus any service fees, you just made $5,000.
It doesn’t always work in your favor, though. If you spent $20,000 on silver futures at $20 each, you would lose $5,000 if the price fell to $15.
To make the arrangement even trickier, your deal also has an expiration date. The price might not hit the one you agreed to, which means you never buy anything. Similarly, you could buy futures that never reach your sale price, which leaves you stuck with silver futures you might not want in your investment portfolio.
There is potential to make money, but it’s basically a form of short-term betting. Additionally, many investors do not have the skills, knowledge & risk tolerance to engage in silver futures & options contracts.
An ETF (exchange-traded fund) gets traded on stock markets. The good thing about silver ETFs is that their performances are based on the changing value of physical silver. You can also buy and sell silver ETFs easily.
Many people see silver ETFs as ways to add stability to their investment portfolios and hedge against inflation. Unfortunately, the IRS charges a higher capital gains rate on any ETF that you hold for longer than a year.
While silver ETFs can offset the risk in an investment portfolio, the effectiveness depends on how well the ETF is managed. You essentially pay someone to manage your silver investment for you. Generally, there isn’t much to manage with a Silver ETF, so you end up paying management fees, storage fees and other costs for no reason.
Silver mining company stocks
Plenty of mining companies that extract silver from the ground trade shares on public stock markets. You can invest in these companies just like you would any other. Keep in mind, though, that you’re not buying silver. You’re investing in a company that mines silver. The value of your investment, therefore, will vary depending on factors outside of the precious metals price. Lawsuits, poor management, and many other concerns could adversely impact your investment. Silver mining companies are very volatile compared to physical silver.
Buying silver bullion is the purest way to invest in silver because you do not have to get involved with the stock or commodities markets. Instead, you purchase real silver that you can keep secure for as long as you want. You don’t have time limits. You don’t have to worry about a company making a bad decision that tanks its stock price. You get the real thing, and you know its value by its purity and weight.
Investing in silver bullion is ultimately about waiting for the precious metal’s price to increase. You don’t need to talk to many collectors, though, before you discover that many of them have interests in the beauty and history of silver products, including coins, bars, and rounds.
It’s fun to talk to other collectors about American Silver Dollars. They have a rich history and beauty that make them more valuable than their metal.
You might also find it more entertaining to learn how to invest in silver like:
- Scottsdale silver bars (you can get a wonderful sense of satisfaction from holding these in your hand).
- 100 oz silver bars from countries all over the world (again, feeling the weight is remarkable).
- Silver coins from places like China, Australia, Canada, African countries, and the U.S.
Owning silver as physical property is much more exciting than investing in ETFs and other assets that are difficult to understand. Plus, no one will ever deny the value of silver. No one knows what the future holds. Centuries from now, the money you keep in your bank account might not mean anything. With physical silver, you can pass wealth down from generation to generation.
Comparing Silver With Other Investment Options
Everyone needs diverse investments that balance risk and safety while gaining value. No one should bet all of their investment money on silver. It makes more sense to build a diverse portfolio of assets.
Still, some investment options come with more benefits and disadvantages than others. Consider the following comparisons so you can learn to buy silver when the time is right.
Silver vs. Gold
Gold is a terrific investment, but it takes quite a bit of money to buy. An ounce of gold often costs more than $1,700. You can often buy a gram for about $60, but you don’t get much in return. You’d have to buy a lot of gold to make it worth your while.
Silver has a much lower entry price. Obviously, the price varies depending on the day. You can often expect to buy an ounce for around $25-$30. At that price, it’s so much easier to learn how to invest in silver successfully. Even if the price falls temporarily, you don’t risk nearly as much.
With silver, you can purchase coins and bars that you store at home, in a safe, or in a bank’s security deposit box. You can also use insured, secure storage facilities that will protect your precious metals. We have secure facilities in:
- Salt Lake City
With the right storage option, you never need to worry that someone will take your physical assets. That’s not something you can guarantee when you keep your silver at home, even when you use a safe.
Silver vs. Stocks
To some extent, the stock market affects the price of silver. When technology companies perform well, the demand for silver increases, which pushes the precious metal’s price up.
The correlation between the stock market and silver can get a bit murky, though, because it depends on which companies are thriving and which are failing.
History shows that stock markets go through periods of booms and busts. You can lose a lot of money during a bust. Investment experts, however, point out that you can use falling prices as a chance to purchase more stock with less money.
The same strategy often applies to silver. When the price decreases, you can buy it and wait for the value to increase.
Silver vs. Bonds
Bonds earn a consistent interest rate, so you know how much you will make when you buy them. The stability and certainty appeal to a lot of people. Unfortunately, bonds don’t earn much interest. Depending on when you buy, you might only get less than 2.5 percent for a 30-year bond. More likely than not, inflation will exceed 2.5 percent, which means you actually lose value with bonds.
Silver doesn’t give you any guarantees, but you have more opportunities to make higher profits—especially when you buy the metal when it’s low and sell it when it’s high.
Silver vs. Cryptocurrencies
Few investments are as volatile and unpredictable as cryptocurrencies like bitcoin. People who have made significant profits from bitcoin did so by purchasing the digital currency shortly after its release. At the time, few people knew about bitcoin. In 2009 and 2010, investors could buy a bitcoin for $1 or less. In April 2021, bitcoin reached $60,000.
The rapid growth of cryptocurrencies makes them look like excellent investment opportunities. A closer look reveals fast-paced boom-and-bust cycles. One of the largest busts happened between December 2017 and December 2018. During that period, bitcoin fell from $13,800 to $3,300.
The threat of government intervention could also harm cryptocurrency growth in the future. Beware of this option. It hasn’t been around for very long, and it has a lot of downsides.
While silver has a slightly volatile value, its fluctuations don’t compare to bitcoin. You can also rely on silver’s history as a precious metal admired by civilizations around the world.
Furthermore, you can store your silver safely. Bitcoin investors have lost millions of dollars simply because they forgot their passwords or misplaced thumb drives.
Strategies to Buy Silver and Make Profits
Making a profit from silver investments requires a strategic approach based on real-world information. You cannot count on luck. You need data from a reliable source.
We make it easy for you to explore your investment options by comparing charts, prices, and price changes. Charts let you compare the changing values of:
- Crude oil
- US Dollar
- The Dow Jones Index
- The S&P 500 Index
- The FTSE 100 Index
You can even set beginning and end dates so your charts show prices from a specific period.
If you want to compare the prices of silver and gold over the last month, you can view them within the same chart. You can even add as many investment options as you want. Of course, the chart gets a bit crowded when you add more than three of four options.
Knowing how values have changed over the past month, six months, year, and other time frames don’t ensure that you will make the right investment decision. It could improve your chances of choosing the right investment and the right time to purchase it.
Buy low and sell high
You want to make as much money as possible from your silver investment. A lot of investors like silver because its value changes frequently. Over the course of a month, silver could easily gain or lose at least $3 of value. That might not sound like much, but savvy investors can turn those small changes into big profits.
Let’s say you purchase 1,000 ounces of silver on July 1, 2020. On that day, you could buy an ounce of silver for $18.01, which is low for silver over the last few years. When you saw that price, you might have correctly identified July 1 as a good day to buy silver.
The price of silver began to increase in August of the same year. With excellent timing and forethought, you might have decided to sell your 1,000 ounces of silver on August 6, when the price reached $29.77.
Having made this move, you would have earned about $11.76 per ounce. That comes to a net profit of $11,760.
Keep in mind that this is a pretty ideal scenario based on someone who made the right choices and the right times. Had the investor waited to sell on August 11, the price would have been $24.92. That’s still a profit of over $6,000, so there’s nothing to complain about. It isn’t nearly as fortuitous as $11,760, though.
Precious metals are long-term investments however, and many investors hold their metals for 5-10 years. The purpose of physical silver is a long-term, safe haven investment and should not be used for short-term trading.
Buy and hold
With silver, you can always hold on to your investment and wait for the price of silver to rally. Maybe you have to wait a few months or a few years. Regardless, you have a commodity that tends to retain its usefulness and value. It will almost certainly recover any losses. You just have to wait for the correct time to sell.
It’s likely that demand for silver will grow as society becomes increasingly connected to mobile technology. A century ago, people spent a lot on silver because of its beauty and use as currency. Obviously, beauty still motivates buyers and investors believe in its use as sound money. A new source of value, however, comes from silver’s usefulness.
Assuming that the tech industry keeps moving in its current direction, you can expect a buy-and-hold investment strategy to help you generate profits in the future.
Evaluate the economy to find opportunities
Silver’s usefulness plays a critical role in its value, but other forces also influence the precious metals price. When you learn how to invest in silver, you should take time to learn about how these factors interact with silver’s price.
The ideal time to buy silver would likely involve:
- Low interest rates.
- Growing inflation.
- Declining value of the US Dollar.
- Strong economic growth.
These conditions would likely push up the value of silver, but it would also create financial challenges throughout the United States. High inflation combined with the dollar losing value would generate a lot of confusion in the economy as companies tried to adjust the prices they charge and the amounts they pay employees.
Households would also struggle to determine how much they feel comfortable spending on essential goods.
You might love that your silver value has increased, but you would hate going to the store. You might want to increase your investment in silver when you see:
- A relatively low price for silver.
- Low interest rates.
- A rapidly growing economy.
Again, nothing can ensure investment success. Some scenarios, however, make success more likely than others.
Add silver to your IRA (Individual Retirement Account)
An IRA gives you tax advantages that make it easier to save for your retirement years. IRAs already give you some risk protection by investing in funds instead of individual stocks. Funds include stocks from multiple companies. This gives you a managed approach that can adjust to changes in the market to give you better returns on your money.
Most IRA managers can also work with you to determine what level of risk you want to accept. Often, the appropriate level of risk corresponds to your age. Someone just starting a career can afford to take more risks. Someone nearing retirement needs a low-risk IRA that will not lose money.
A manager with the right knowledge to choose investment funds for your IRA can make a huge difference in performance.
IRA managers, however, get so focused on the funds they prefer that they can forget about other ways to prepare you for retirement. We can strengthen your IRA and protect it from risk adding precious metals to diversify your portfolio.
Some benefits of adding silver and other precious to your IRA include:
- Holding value with tangible assets.
- Metals do not get taxed until you sell them.
- Silver has an affordable price that lets you add to your portfolio at a pace you feel comfortable with.
- No-risk storage from an insured, secure facility.
Start adding silver to your IRA by opening and funding an account. Then, you can order silver from Solid Financial Solutions and we take care of the rest.
Buy Silver from a Reliable Seller
No matter what strategy you take after you learn to invest in silver, you need to find a reliable seller you can trust to fulfill agreements and give you fair prices. In fact, finding a reliable business is an essential part of learning how to buy silver.
Solid Financial Solutions stands out as one of your best options.
Don’t run the risk of using a company that hasn’t been vetted by other investors. We uphold the highest standards to make sure you have an enjoyable experience.
Get a Fair Price When You Sell Silver
When it comes time to make money from your silver investment, you will need to find a buyer willing to pay a fair price.
We make it easy for you to sell silver and reap the financial benefits of your investment.
Learn How to Buy Silver the Easy Way
Solid Financial Solutions strives to work with you every step of the way to make it easy for you to learn how to buy silver in a way that leads to profits. We stand out from our competitors by:
- Locking in fair prices when you buy and sell precious metals from our website.
- Giving you a broad range of silver products to buy.
- Storing your silver in a secure facility, or letting you handle storage. It’s your choice!
- Providing up-to-the-minute charts that show the current and past prices of precious metals as well as other common investment options.
We have earned a positive reputation for trustworthiness and speed.
If you have any questions about investing in silver, please call us at 403-910-7395.
Investing in silver has never been easier or more secure. Find out how you can take advantage of this opportunity to grow wealth and add balance to your investment portfolio.