Investors buy silver for three reasons: as an investment, as a hedge against inflation, and for replacement of fiat currency. While many dividend growth investors see no value to holding silver, because it pays no compounding dividend, I believe some precious metal give extra-diversification to any portfolio.
Buying for investment is simply a supply/demand trade on the price increase. It’s a commodity trade counting on the silver spot to rise. Or, it could be buying a silver coin with numismatic value, again hoping for value appreciation. Printing money, deficit spending, and endless debt increases has become the norm for leaders both home and worldwide. For no other reasons than these, it’s wise to hold some assets in precious metals.
Considerations
Best Ways to Buy Silver
Regardless of your reason for holding silver, the aim is to buy silver priced on the weight of the precious metal. For example, silver bars and coin are priced on weight, meaning that 1-oz coin or 1-oz bar carry the same amount of raw silver.
You also want to buy silver that is.999 fine silver. The best source will be a reputable dealer. Avoid scammers by using reputable dealers like American Precious Metals Exchange, JM Bullion, Provident Metals, and others with proven business practices.
Coins
Silver coins are minted specifically by a central government and come with an official guarantee of both weight and silver purity.
Silver Rounds
Silver rounds resemble coins but private mints make rounds and they’re not backed by a guarantee like government assurances. They are less expensive (lower cost over spot) and good for larger quantity purchases but are not legal tender (money). However, they’re tradable in a financial meltdown, as the weight of raw silver is all that matters.
Silver Bars
For larger amounts of silver, bars are the best choice. Silver bars can run in 1-oz, 10-oz, and 100-oz options. Larger silver quantities are also available in bars. Buying larger amounts offers a better discount off the spot price.
As with rounds, bars are not backed by the government. The goal, however, is to acquire larger amounts of silver at a lower premium that is easily storable and tradable at the market price.
Junk Silver
Junk silver is not what it sounds like – a ‘junk’ investment. It’s any old silver coin in fair condition without collectible value but with true silver content. Junk silver is important since these coins have the lowest spot price of any physical silver.
Summary
Past actions from central banks often prove that they don’t have many weapons against financial stagnation. On the other hand, central banks have proven they can print and offer cheap money backed by nothing more than a promise.…