Is Investing in Physical Silver Worth It?

Investors like silver for many reasons - it's an alternative to traditional investments like stocks and bonds and acts as a store of value in times of uncertainty. Learn more about investing in physical silver.

Is Investing in Physical Silver Worth It?

As a physical asset, it has an intrinsic value that is unlike the dollar or other currencies. Silver maintains its long-term value and works well when interest rates are low and fixed income investments don't generate large returns. In this way, silver functions similarly to gold as an investment, acting as a safe haven for investors. When it comes to accessing the silver markets, owning physical ingots and buying ETFs both have their advantages and disadvantages.

For those looking for an easy and instant investment in silver, funds are the way to go. However, if someone truly believes that the financial system will collapse, physical silver is an ideal alternative. It may be wise to own both. Mining stocks, especially dividend-paying silver stocks, may also be a better option than silver ingots for some investors.

Precious metals, such as silver, have long been an alternative to traditional investments, such as stocks and bonds. Investors like silver for many reasons, but many see it as a store of value in times of uncertainty, while others see silver and other precious metals, such as gold, as a hedge against inflation. New technologies, such as silver oxide batteries, conductive silver inks and several silver-based nanotechnologies in medical applications, are rapidly becoming standards in their industries. Silver futures are an attractive way to play in the silver market because of the large amount of leverage available in futures contracts.

When people invest in physical silver, whether by buying a silver ingot, pure silver, a coin or other items, they ensure that its value has persisted and will remain so. If you don't want to do a lot of analysis about silver miners, but you still want to know the advantages of owning a mining company, you can turn to an ETF that owns silver miners. Funds such as the iShares Silver Trust (SLV) have made it fairly easy for regular retail investors to access the silver market. If you don't want to directly own physical silver, but you still want a lower-risk method than futures, you can buy an exchange-traded fund (ETF) that holds physical silver.

An ETF that owns physical silver will return the price of silver minus the cost ratio of the ETF. Traders can also bet on the silver market through an ETF that holds futures contracts through ProShares Ultra Silver (AGQ), although it's better as a short-term bet than as a long-term hold due to its structure. It was confirmed that many investors rushed to gold traders to invest part of their savings in gold and silver ingots and coins when times got tough or the economy faced strong inflationary pressures. For those looking to hedge their bets or invest more defensively, investing in silver is a way to ensure that they have a currency that cannot be inflated by the printing of money or by a potentially destructive Federal Reserve policy.