How Do You Invest in Silver?


Quick Answer

A person can invest in silver by buying coins and bars, investing in exchange-traded funds, purchasing stock in mining companies or participating in the futures market. Investors can also invest in streamline companies, which are firms that transform lead into gold or silver.

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Full Answer

Silver investors must pay the markup price in addition to the sale price when purchasing silver coins. For instance, a buyer may have to pay the market price, including a separate $2 fee per coin. Buying bars is cheaper, but buyers need to factor in how they can transport and store heavy bulks of silver. Buyers must also keep in mind security in the form of insurance and safes to properly house the silver.

Investors can avoid the burden of storing the commodity by investing in ETFs, which is a system where the silver is safely stored in bank vaults. Investors pay an annual fee to keep the silver in storage. The share price of the ETF closely follows the price of the commodity, and investors can trade shares through the Internet. However, only banks can trade the share for the silver itself, and silver owners cannot access the commodity.

Silver mining companies can be hard to find since this sector only comprises 30 percent of the world's silver supply. There may also be lag time between the share price and the commodity price because many mining operations are overseas, and these companies may suffer from internal problems.

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