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What makes Silver Investments so Promising?

In recent years, few investments have shined like silver. In 2010, silver prices rose by an astounding 84%, and are currently at 31-year highs. The silver/gold ratio has fallen from 70 just two short years ago to 37 today, illustrating the increasing value of silver relative to gold.

The reasons to invest in silver are solid. Like two sides of a coin, silver demand is driven by investors and industry. As a safe haven asset and store of value, silver preserves and protects wealth in times of economic distress. As an industrial metal, silver is indispensible.

Silver can be found in an ever expanding array of products such as televisions, computers, and smart-phones. As income levels continue to rise in the emerging economies of China, India, and Brazil, an increasing number of consumers are beginning to demand these products as well as view silver as an investment.

There are different ways to invest in silver. Each has its advantages, depending on the needs and objectives of the investor.

Physical Silver

	Silver Bars – Silver bars are minted in a variety of sizes ranging from 5 grams to 1000-troy oz. 100 oz silver bars and above are a popular choice for silver investors who wish to physically hold silver for the long-term. As a general rule of thumb, the cost of obtaining precious metals goes down when larger amounts are purchased. Large silver bars carry lower premiums over spot and store quite well because of their rectangular shape.
	Silver Coins – Silver bullion coins represent the easiest way to invest in silver. Produced by government mints around the world, these silver coins are legal tender and carry assurances of weight, content, and silver purity, making them very liquid. Popular silver bullion coins like the American Silver Eagle and Canadian Silver Maple Leaf have a weight of 1-troy oz, which makes their value easy to track by simply referencing the current spot price of silver.
	Silver Rounds – Another way to own physical silver is through silver rounds. These silver rounds are produced by private mints which generally translate into lower premiums over spot prices than legal tender silver bullion coins as private mints have the ability to keep their production costs low.
	90% Silver Bags – Investors can also purchase 90% silver bags. These are bags of commonly circulated U.S. coins minted 1964 or earlier. The silver content in these nickels, dimes, quarters, half-dollars, and dollars is 90%, making these coins significantly more valuable than their face value. One of the main advantages of investing in 90% silver bags is that they can be easily broken up into smaller unites – ideal for bartering.

Non-Physical Silver

Silver Mining Stocks

You can benefit from the rising price of silver by owning stock in mining companies. Since silver is often produced as a by-product of the mining process, owning shares in a mining company will also give you exposure to increasing prices of base metals like copper, zinc, nickel, and tin. Rather than simply going by commodity prices, investors of mining stocks need to take a larger view of the company itself in evaluating the share price. Rather than investing in specific companies, some investors prefer to manage their risk by investing in diversified mining mutual funds.

Futures

The futures market is yet another method of silver investment. Silver futures and options, are listed on all of the major exchanges around the world. In the United States, derivatives (silver futures) are traded mainly on COMEX (Commodity Exchange), which is a secondary  market of the New York Mercantile Exchange.

ETF

Silver exchange traded funds, or ETFs represent a quick and easy way for an investor to speculate on the price of silver without having to take actual delivery of the silver itself. Investors should be mindful of the fine print and fees that are associated with ETFs. Some of the more popular silver ETFs are:

• iShares Silver Trust (NYSE: SLV)
• ETFS Physical Silver (LSE: PHAG)
• ETFS Silver Trust (NYSE: SIVR)
• Sprott Physical Silver Trust (NYSE: PSLV, TSX: PHS.U)