Investing in silver is an accessible and affordable means to diversify your portfolio. Assets denominated in fiat currency like stocks or bonds are prone to volatility from any number of causes. But a commodity like silver retains a level of inherent value thanks to its scarcity, beauty, and industrial and commercial applications.
But buying silver can be more complicated than newcomers might imagine. There are several common types of silver that you can buy, and not all silver investments may be equal.
To help you make the best possible investment choice, let’s take a look at the most common kinds of silver that you’re liable to find.
When you look into how to invest in silver, one of the common points of entry you’ll be recommended is buying silver coins.
Many governments mint official bullion coins. The American Silver Eagle, for instance, is the most widely-traded silver bullion coin.
The biggest advantage of officially-minted coins is that they are easy to exchange for cash. Being backed by the government, they carry a guarantee as to their quality and purity. And because their designs are standardized and recognizable, they’re easy to authenticate.
For those reasons, it’s always easy to find buyers for silver coins if you need to liquidate them for some quick cash.
Private mints likewise offer bullion coins for sale. As they don’t carry the same guarantee as government coins, it’s important to deal only with recognized coins from reputable mints. The 1 oz Silver Kangaroo from Perth Mint is an excellent and accessible example.
Silver bars are rectangular, with varying thicknesses depending on their weight. Like bullion coins, they range from 99.9 to 99.99% pure, depending on the mint that produced them.
Their main advantage over coins is that they carry lower premiums, the surcharge applied by the mint for production, than coins. This is because their designs are less intricate and are usually of larger denominations, resulting in a lower production cost per ounce of silver.
The main downside is that because of that larger denomination, you can count on them requiring a larger upfront investment. And because of the greater value, it can sometimes be more difficult to sell them off in a hurry should the need arise.
“Junk” silver is perhaps a misnomer. They’re simply U.S. dimes, quarters, or half-dollars minted in 1964 or earlier.
Prior to 1965, these coins contained at least 90% silver. So unlike pure silver coins or bars, they’re priced according to that weight.
Junk silver is not as popular as modern bullion items, but they have the advantage of being smaller-in-size and therefore requiring a smaller upfront investment. You may well have some of these coins tucked away somewhere already.
Choosing the Right Types of Silver for Your Profile
Maintaining a diverse investment portfolio is vital for insulating yourself against the fickle whims of the market.
Choosing the right types of silver for your purposes will help you to compile the strongest possible portfolio, whether that means buying high-value bars or small-denomination coins and junk silver for their liquidity.
But silver is only one commodity among many that you can use to bolster your portfolio. To make sure you’re always building your wealth as safely and effectively as possible, be sure to keep up will all of our latest business news and views.