Everyone is looking for smart ways to invest their money without losing it. Silver holds a high potential, but it’s not for every investor. This article seeks to reveal some of the smartest ways to invest and earn good returns from silver.
Silver is used for a variety of things—from manufacturing technological products to jewelry making and even drug production. This makes silver a very essential commodity. And because original silver is not a man-made mineral, its availability is limited. For new silver deposits to be found, a lot of mining has to be done. This is what makes silver such a treasure that people invest in with the hope that there would be a considerable increase in prices and value, which would translate to profit for investors.
In February 1998, Warren Buffett disclosed that he had acquired 130million ounces of silver and stored it in a warehouse. Warren Buffett; at several intervals has made strategic investments in Goldman Sachs, Coca-Cola, and other companies. In September 1998, Canadian business ran an article indicating that Bill Gates has made a buy-in silver, acquiring a 10.3% stake for $12million of a Canadian silver company listed on the Vancouver stock exchange.
Investors invest in silver in various several ways.
1. Investing in stocks of silver mining companies
If you find the whole process of investing and monitoring the value and prices of silver very complex, you can simply buy shares in a company that engages in the mining of silver. Some of such companies include Pan America Silver (PAAS)-: Launched in 1994, this company has been at the forefront of silver mining, producing an average of 25 million ounces of silver yearly. Silver Wheaton-: This is another silver mining company, which is a favorite amongst investors with a market cap of over $10billion.Silvercorp Metals Inc (SVM)-: Silvercorp is based in Vancouver but has strong ties with and in fact, operates from China. It is also popular amongst investors because of its attractive dividend rates of about 1.1%. First Majestic Silver (AG)-: Mining more than 70,000 hectares of land yearly, First Majestic Silver has a market cap of over $1.6billion and owns several other miners as well. Endeavour Silver Corporation (EXK)-: Although regarded as a high risk/high potential investment, EXK still remains a popular choice among investors.
There are several other strong silver mining companies with great potential that silver investors could invest in—such as Heckla Mining, Great Panther Silver, and Coeur d’Alene Mines Corporation. When you want to invest in such stocks, you should carefully consider the liquidity of the stocks as well as the dividend payout ratios before you invest.
2. Investing in exchange-traded funds
Also popularly known as ETFs, exchange-traded funds are one of the popular ways by which investors access to silver. You would be able to buy and sell your silver on the floors of the stock exchange market just like any other commodity. Some popular ETF’s that trade in silver includes Silver Trust, Silver Miners, Ultrashort Silver, and Physical silver shares to mention a few.
3. Investing In silver bullions
This is probably the safest way to invest in silver because it is easier to physically monitor your investments. However, the problem with investing in silver bullions is that sometimes, the costs of investing and holding the bullions can run higher than the value itself. Some of the ways to invest in silver bullions include Silver coins: You could become a collector of silver coins with varying ounces, logos, and designs. Silver bars-: You could invest in silver bars with the minimum weight put at 1,000 ounces. This type of silver investment is usually reserved for the moneybags who can afford to shell out a minimum of about $30,000 to invest in them.
4. Futures contract-:
This is a rather complex investment method, and it is better used by expert investors. However, it is one of the most powerful ways of investing in silver for people who understand it.
5. Mutual funds-:
You could also invest in silver through mutual fund investments. To select the best method for investing in silver, you should do the following: Study the market: Even if you have financial advisors and managers, you should also ensure that you perfectly study and understand the market and what it entails. Conduct online research: There are lots of helpful information as well as real-life stories online which you can learn from.
Buy close to the spot price: Ensure that you only pay reasonable prices as fees and make sure that you always buy at a price that is as close to the spot price as possible. Monitor the market: Lastly, you should ensure that you closely monitor the market. Silver has disappointed a lot of people in the past and you don’t really want to be on that boat so you should stay on top of the market and monitor the changes and trends so that you would know when to hold and when to sell.