Is Silver a Good and Safe Investment?


Quick Answer

Both physical silver and shares in silver funds have positives as investments, although they are not as safe as government-backed savings vehicles, according to Investopedia. Certain factors erode the value of physical silver, but silver funds have better performance records.

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Full Answer

Precious metals such as silver, gold and platinum have become common items in portfolios for people concerned about the long-term viability of the global economy. Exchange-traded funds, or ETFs, have given investors a chance to invest in funds that follow futures contracts or purchase physical metals. Owning physical silver is also attractive for a number of reasons, reports Investopedia.

Investing in funds that deal in silver exposes the account holder to a significant amount of risk. Silver has applications in a number of different industrial uses, such as solar panels, photography, electronic products, silver oxide batteries and a number of nanotechnologies. This causes the price to jump around more haphazardly than gold, meaning that fund values jump around as well, explains Investopedia.

Physical bullion provides the satisfaction of having the metal on hand, but commissions often cost as much as 20 percent for purchases, as of 2015. Storing the silver in safe-deposit boxes incurs a monthly fee, and home safes can cost thousands of dollars, depending on the size. While having the metal on hand does provide some security, it comes at a significant cost, notes Investopedia.

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