A Short Guide to Buying Silver

If you’re interested in buying silver, the first step is to identify your two major options. Would you rather buy the precious metal itself, or proxies that represent silver value, such as silver stocks?

No one path is better than another; each has its pros and cons. For beginning investors, however, buying silver as a precious metal is usually the way to go. Although all silver assets are considered “safe haven assets,” meaning assets whose value holds or rises during tumultuous financial times, investing in silver metal tends to be safer and more affordable than investing in silver proxies. When you invest in silver metal, you retain direct control over your assets and minimize counterparty risk.

Here’s a short guide to buying silver.

Silver Bullion

Silver metal investors like to invest in silver bullion, meaning silver coins, ingots, rows, or bars that are at least 99.9% pure silver. When you buy silver bullion, you can choose to insure and vault it with a secure third party, such as a bank, or to store it on your own, by for instance locking it inside a safe. Buying 1 oz bars or coins is the most common way to buy silver bullion, though other forms are available for purchase.

When deciding how to buy silver bullion it helps to know that bars may be sold closer to spot price than silver coins, which may be pricier than silver bars because they can have higher production costs and therefore higher premiums.

Investing or Collecting in Silver

If you’ve decided on buying silver bullion, the next step is to figure out whether you’re interested in buying it as an investor or as a collector. Your goals may dictate whether it’s better that you buy silver coins or silver bars.

Silver bars are precious metal lumps or ingots struck by private silver mints and government mints, and typically do not carry legal tender. Silver coins are precious metal wafers struck in a coin format by a government mint, and typically do carry legal tender.

There are many factors to take into consideration when deciding between silver bars and coins. Simply put, though, if you’re interested in buying silver bullion as an investor, then you’re probably better off investing in silver bars. As a collector, however, silver coins might be the way to go.

The goal when investing in silver bars and ingots is to make a profit in the market. The best way to do this is to buy bars and coins when the price per ounce of silver is low and sell it when the price per ounce is high.

When collectors buy silver coins, by contrast, they take into consideration the coins’ aesthetic and personal qualities, in addition to the price per ounce of silver.

Collectors often prefer silver coins over silver bars and ingots because coins tend to have more aesthetic and personal qualities. Whereas the value of silver bars and ingots is determined by their precious metal content, the value of silver coins can depend on additional factors such as design and uniqueness.

Mints in Canada frequently put out limited-edition commemorative bullion coins. These limited run coins sometimes do become more valuable in the future than bullion, but not typically; bullion tends to be a more reliable investment.

Once you’ve decided what kind of silver bullion you’d like to buy, the next step is easy. There’s no need to schedule an appointment with a banker. All you need to do is find a reputable online or in-person silver dealer who will teach you all you need to know to buy silver.

Image Source: BigStockPhoto.com (Licensed)

Site Disclaimer 

The Content in this post and on this site is for informational and entertainment purposes only. You should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our Site constitutes a solicitation, recommendation, endorsement, or offer by HII or any third party service provider to buy or sell any securities or other financial instruments.

Nothing in this post or on this site constitutes professional and/or financial advice. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this post or on this site. 

You recognize that when making investments, an investor may get back less than the amount invested. Information on past performance, where given, is not necessarily a guide to future performance.