How to Invest in Silver in 2024

Ruby Layram 28th Aug 2024 No Comments

Reading Time: 6 minutes

Investing in silver might not be the first thing that pops into your head when you think about building wealth, but it’s an incredibly versatile and often overlooked asset.

Most recently, the precious metal has shown bullish momentum, heading towards $30. If Silver continues to show strengths, now could be an excellent time to consider adding it to your portfolio.

Whether you’re new to investing or looking to diversify your portfolio, silver is an intriguing investment to consider. In this guide, we’ll walk you through how to invest in silver, from the reasons why now might be a good time to buy, to the different ways you can add this precious metal to your portfolio.

• Why is now a good time to buy Silver?
• 3 Ways to Invest in Silver
• How to Invest in Silver ETFs
• Is Silver a Good Long-Term Investment?

Why is Now a Good Time to Buy Silver?

Let’s start with the big question: Why silver, and why now?

Silver has always been considered a valuable commodity, but its appeal is particularly strong during times of economic uncertainty (hello upcoming US election!). With the rising cost of living, the upcoming US election, the recent fallout from the Yen carry trade and tensions in the Middle East (to mention just a few!), many investors are turning to tangible assets like silver as a way to hedge against market volatility.

Of course, Silver isn’t the only asset that can be used to protect your wealth. It’s often seen as the little brother of Gold. Investing in both could be a good way to diversify and take advantage of two different precious metals.

So, whether you’re looking to protect your wealth or diversify from Gold, silver could be a smart move right now.

3 Ways to Invest in Silver

When it comes to investing in silver, you have a few different options. Let’s take a closer look at three of the most popular ways to invest in silver.

1. Buy Silver Bullion or Coins

The most straightforward way to invest in silver is to buy physical silver in the form of bullion or coins.

When you buy silver bullion, you’re purchasing pure silver bars or coins that are typically stamped with their weight and purity.

Another option (which is my personal favourite!) is to invest in silver jewellery. The perfect excuse to treat yourself to something nice!

One of the benefits of owning physical silver is that it’s a direct investment that you have complete control of.

However, there are some downsides to consider. Physical silver needs to be stored securely, and there can be costs associated with this, whether you choose to keep it in a safe at home or in a secure storage facility.

Additionally, buying and selling physical silver can be less liquid than other forms of investment, meaning it might take longer to convert it back into cash. The process of selling physical silver can take weeks (sometimes even months) to complete and you may struggle to get the best price for your investment.

2. Silver ETFs

If you’re looking for a more digital way to invest in silver, a Silver ETF could be the right choice.

Silver ETFs track the price of silver and allow you to gain exposure to the metal without having to deal with the hassles of buying and storing physical silver.

One of the key benefits of investing in silver ETFs is liquidity. Unlike physical silver, ETFs can be bought and sold quickly through a brokerage account, making it easy to enter and exit your investment. Plus, they often come with lower costs since you’re not paying for storage or insurance.

However, it’s important to remember that when you invest in a silver ETF, you don’t actually own any silver.

Instead, you own shares in a fund that tracks the price of silver, which means your investment is subject to the performance of that fund and any management fees they charge.

3. Silver Mining Stocks

For those willing to take on a bit more risk in exchange for the potential for higher returns, investing in silver mining stocks might be worth considering.

When you buy shares in a silver mining company, you’re investing in companies that extract, or take part in extracting, silver from the ground.

The performance of silver mining stocks is closely tied to the price of silver, but it’s also influenced by factors like the company’s management, production costs, and success. This means that silver mining stocks can offer exposure to the price of silver — when silver prices go up, mining stocks often rise.

However, returns can be minimized by poor company management or performance.

How to Invest in Silver ETFs

Out of the three options that we have mentioned above, Silver ETFs are probably the best place to start. ETFs are easy to buy, cheap to hold and liquid.

Here’s a simple step-by-step guide to getting started.

Step 1: Research Available ETFs

Never make an investment decision without conducting thorough research.

You should spend time reviewing different Silver ETFs that are available to find one with a strong reputation and solid history of returns.

Other key aspects to consider are the fund’s liquidity and the bid/ask spread (a larger spread can make the fund more expensive to buy).

For more information on how to research shares, check out our guide on how to research stocks.

Step 2: Find a Broker That Offers the ETF

Once you’ve chosen an ETF, you’ll need to find a broker that offers it.

Most major online brokers, like Vanguard, Fidelity, or Charles Schwab, will offer a range of ETFs, including those that track silver.

I sometimes like to start with this step. Doing so narrows down the selection of ETFs available, which makes it a little easier to decide!

Step 3: Create an Account

Once you have found a broker that offers a Silver ETF, you will need to create an account.

If you already have a broker account, you can skip this step!

Signing up usually involves providing some personal information, such as your name, address, and tax number, as well as choosing the type of account you want to open.

Step 4: Fund Your Account

Now its time to part ways with your cash!

Connect a payment method to your account and deposit enough funds to cover the purchase of the ETF. A good idea is to start with the minimum deposit and gradually increase the size of your investment over time.

Step 5: Buy Shares of the Silver ETF

Use the explore feature on your brokerage account to search for the ETF that you would like to purchase. If you struggle to find it, I recommend contacting customer support.

Once you have found the ETF, enter the number of shares that you would like to buy and then confirm your purchase.

Step 6: Monitor and adjust

After buying the ETF, it’s important to keep an eye on your investment. Monitor the price of silver and any news that might affect its value, and consider rebalancing your portfolio if necessary.

Use our helpful guide on how to spring clean your investment portfolio to find out more about this.

Is Silver a Good Investment?

We’ve already taken a look at why now might be a good time to add Silver to your portfolio. But, is Silver a good investment long-term?

Consistent demand

One of the main reasons silver is considered a good investment is its consistent demand.

Silver is used in a wide range of industries, from technology to healthcare to jewellery, which helps to support its price even during economic uncertainty. It doesn’t look like we will stop using silver any time soon!

Store of value

Silver, like gold, is often seen as a store of value. This means that it can hold its value over time, making it a popular choice for investors looking to protect their wealth from inflation and currency fluctuations.

Limited supply

The supply of Silver is limited because of the way that the metal is extracted from the ground. As demand increases, especially with the growing use of silver in green technologies, the price of silver could rise, making it a potentially profitable investment long-term.

Unlike money, you can’t just print more Silver when you need it!

Investing in Silver could be a great way to diversify your portfolio with the underdog of precious metals. The commodity has recently shown volatility and could be moving upwards, which makes now a good time to consider buying.

However, timing the market is impossible and your best bet is to use a strategy such as dollar cost averaging to gradually build your investment in Silver over time.

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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.