Buying Silver on Paper:
Buying silver on paper is the same as saying you are buying stock in silver. Silver stocks are traded on many of the world’s stock markets. Its not hard to buy silver if you want the metal to be stored in the sellers vaults for you, however physical delivery is somewhat more challenging.
But the downfall of buying silver stocks is the same as buying any other stock. The physical purchase is only a paper certificate, and under certain circumstances, the investment in a stock can equal a loss of investment.
That difference is why investors buy physical silver. Silver can be sold as a stock, coin or as a bar. Coins and bars are physical and even if the price of silver should drop the investor still holds a physical silver piece.
Unlike stocks where outside influence such as political or financial situations can cause the price of the stock to fall, physical silver will always be of value. Buying silver stocks should follow an investment plan similar to buying other types of stocks. The difference is that silver stock can perform well during times of inflation. Inflation can also be a risk.
Buying Silver Bars:
Buying silver bars is also a fairly straight forward process. The price of silver bars is equated to a dollar price per ounce.
Buying physical silver has long been a consideration and investment against inflation. Physical silver is not only a commodity that is traded it is also considered a form of currency.
This is why physical silver prices increase when inflation rises. Silver bars are referred to as silver bullion. There are many products that fall under silver bullion. These can be bars, ingots, coins, or tabs.
Coins are listed because some silver coins have very little value besides their weight in silver. The advantage of buying a silver bar comes from the fact that they are uniform. This makes assessing their value pretty straightforward.
Investing in silver bars follows the silver market price index. Like other commodities, silver can be traded bases on price. Unlike other commodities, silver is also considered a currency and can be traded like currency or held as a hedge against inflation.
Buying Silver Coins:
Silver coins have three values. They have their weight in pure silver, and they have a face value as a form of currency and they also have a collector value.
Not all silver coins are valuable beyond their weight. Buying silver coins takes a little bit more investigation. This is because they can be valuable on all three levels. A risk of investing in coins is that wear can reduce their actual weight.
An uncirculated silver coin will usually weigh more than a coin that has been circulated for a period of time. Antique coins should be purchased because of their historical value or weighed to confirm their market value by weight.
An example of how coins can be a better investment than bars is as follows. A single US Silver dollar minted in 1886 from the San Francisco Mint has a collector value that ranges between $29 and $28,440. This example also points out the pitfalls of buying silver coins without doing the homework.
The difference of price in this example is determined by the amount of wear a coin may have. A similar coin minted in New Orleans has a value of $26 to $531,250. Where coins were minted have a direct impact on price as do quality and wear. A silver bar is going to be worth its weight at the current price of silver.
Here is another reason why you should invest in Silver.
Whether an investment is in silver stocks, silver bars or silver coins, the potential for profit exists. This is true of most investments. The difference is that silver investments may rise with inflation whereas other investments may fall as inflation rises.Doing the research is important because the three methods of investing in silver vary from each other.