1. Coins or bullion
Owning physical silver, whether in the form of coins or bullion, is a satisfying way to invest in silver. You own it and can use it if necessary. In some cases, it is relatively easy to access. For example, U.S. coins manufactured before 1964 contain about 90 percent silver, and you can purchase them for the value of their silver content.
If the price of silver rises, you can make a profit on silver coins and bullion, but that is the only way to make money here, since a physical commodity does not produce cash flow, unlike a high-quality business.
You can purchase silver through local merchants, pawn shops, or dealers such as Ruby Jewelers.
2. Investment contracts in silver.
Silver futures are an easy way to bet on the price of silver rising or falling without any of the hassles of owning physical silver. You can also physically take delivery of silver, although this is not the typical motivation for speculators in the futures markets.
Silver futures are an attractive way to trade the silver market due to the large amount of leverage available in futures contracts. In other words, you have to put up relatively little capital to have a relatively large position in the metal. If silver futures move in the right direction, you will make a lot of money very quickly.
3. ETFs that own silver.
If you don't want to own physical silver directly but also want a less risky approach than futures, you can purchase an exchange-traded fund (ETF) that owns physical silver. You will have the potential reward of owning silver if the price rises, but with less risk such as theft.
ETFs offer another advantage as well. You will be able to sell silver at the market price, and the money will be highly liquid. So you will be able to sell your money at the most likely best price, and you can do this on any day the stock market is open.
4. Silver mining stocks.
You can also benefit from the rise in the silver market by owning shares of companies that mine the metal.
By owning a miner you can benefit in two ways. First, if the price of silver rises, the company's profits must rise with it. In fact, silver miners' profits will rise faster than the price of silver, all other things being equal. Second, the miner can increase production over time, which also increases his profits. This is an additional way to win silver, in addition to betting on the price itself.
5. ETFs that own silver miners.
If you're not looking to do a lot of analysis on silver miners but still want the benefits of owning a mining company, you can turn to an investment institution that owns silver miners. You'll get diversified exposure to miners and less risk than owning one or two individual mining stocks.
Is it better to invest in gold or silver?
To understand more which is better for saving and investing in the long term, we will conduct a historical comparison of the prices of both metals over the years.
At the end of 1925, the price of an ounce of gold was $20.63. At the end of 2020, an ounce of gold was sold for $1,893.66, and over a period of 95 years, the precious metal achieved a compound return of 4.87% annually.
It is noteworthy that gold prices ended the year 2023 at a level close to 2063, after reaching a record level of 2100 during the month of December 2023.
At the end of 1925, the price of an ounce of silver was $0.68, and at the end of 2020, an ounce of silver was sold at $17.14, and over a period of 95 years, the precious metal returned a profit rate of 3.46% annually.
It is noteworthy that silver prices closed above the level of $24 by the end of 2023.
This means that gold performed better than silver as a long-term investment, says Dr. Robert R. Johnson, professor of finance at the Haider School of Business at Creighton University, according to what the Bankrate platform recently reported.
However, we must remember that the Fourth Industrial Revolution is still in its infancy, and silver is entering as an essential component in many new and emerging industries, as silver is considered an industrial asset while gold is considered an investment asset because it is not included in many industries.
In the final analysis, silver as an investment is not as popular as gold. In fact, it is a smart and practical investment, especially these days, as the importance of silver increases every day in the era of the Fourth Industrial Revolution due to its entry into a large and important number of industries produced by this revolution due to its high ability to conduct electricity. The heat is unmatched by any other metal.