Silver trading can be a profitable way to invest, but the best way to do it depends on your style of investing. Are you the type of investor who wants to sit on an asset and wait for it to appreciate before realizing your gains? Are you looking for an alternative asset that can protect your wealth from inflation? Or are you the type of investor who wants to stay active, earning marginal profits as frequently as you can?
Once you know what your investment style is like, you can identify the best way to turn a profit by trading silver.
3 Ways To Invest In Silver
First, there are a number of different ways that you can gain exposure to silver in your portfolio. The three most common ways to invest are:
• Silver ETFs
• Silver futures
• Physical silver bullion
Silver ETFs (Exchange-Traded Funds) are an easy way to gain exposure to silver if you are not concerned about actually owning the metal. You buy shares in a fund that aims to track the performance of the metal. Many silver ETFs are backed by the physical commodity, but the fund, rather than you, owns the silver.
Silver futures are a bit more complicated. It is a way of betting on the rise or fall of silver prices without taking delivery. Futures are a good way for very active and informed traders to invest, but it should not be undertaken lightly.
Physical silver bullion is likely the most common way for everyday retail consumers to invest. It is where you buy and sell silver coins or bars. Find more information below.
What You Need To Know About Trading Silver Coins
Trading silver coins is the most direct way to own and invest in silver, but there are a few things you should know before jumping in.
First is the type of coin you want to buy. Bullion coins are typically 99.9% silver. The most common size is 1 oz., but they can come in a variety of sizes, including fractional pieces and heavier coins. Coins are minted exclusively by government mints. They include coins like the Silver Maple Leaf (Canadian), Silver Philharmonic (Austria), Silver Britannia (U.K.), and Silver Eagle (U.S.A.).
There are a number of other types of silver coins out there. Mints also regularly produce commemorative or collectible silver coins. When it comes to these coins, you may be paying a higher premium because of the design and the small print run, and there is no guarantee that they will become desirable collectibles down the line.
There are also silver rounds, which are shaped like coins and have designs on them but are manufactured by private refiners. If you can find rounds at a low premium, just make sure they have the silver purity you are looking for.
For most investors, bullion coins from a national mint are the way to go. Store them in a plastic tube and out of direct sunlight and go to a bullion dealer or silver buyer when you are ready to trade them in and realize your gains.
Why Trade Silver Coins?
There are several reasons people decide to invest in silver. These include:
• Diversifying your portfolio.
• Mitigating the risk of investing in stocks.
• Wagering on long-term appreciation due to supply and demand factors.
If these reasons appeal to you, investing in physical bullion is one of the most reliable ways to gain exposure to silver, and it doesn’t involve paying fees to a fund manager.
