How to Invest in Silver Lombardi Letter 2018-08-21 04:35:38 how to invest in silver ways to invest in silver silver investing silver price forecast best ways to buy silver Silver is an excellent way to hedge against uncertainty. There are a number of different ways for investors to invest in or buy silver. Commodities

How to Invest in Silver

Commodities - By John Whitefoot, BA |
Silver Prices

3 Ways to Invest in Silver in 2017

How and why should you consider investing in silver? Investors flock to precious metals like silver to protect against inflation and hedge against uncertainty. Because of all the ongoing uncertainty, precious metals like silver have, especially since the onslaught of the Great Recession, become retirement portfolio staples.

Despite the so-called decent economic indicators, there are a lot of reasons why silver prices will remain bullish in 2017: uncertainty around the Trump presidency and his policies, the U.S. economy, the global economy, geopolitical tensions, etc.


While silver prices made a strong run in the first half of 2016, climbing 53% to a multi-year high of $21.23, silver prices retreated in the second half of the year on improved economic data and optimism around the Trump presidency.

Still, silver ended 2016 up more than 15%. That’s a good year for a commodity that investors had shunned for a record four years. And 2017 is shaping up to be a solid year for silver prices. Silver is up 5.3% in the first two weeks of 2017, near $16.80 per ounce. By comparison, the flying-high S&P 500 is up just one percent.

Why? With stocks overvalued and momentum stalled, investors are taking a wait-and-see approach to what the Donald Trump presidency will look like. Investors aren’t known for their patience either. If Donald Trump’s campaign-trail promises—which have been behind the post-election market melt-up—don’t materialize and stock market momentum fades, silver sill be another contender for top investments in 2017.

If you’re interested in adding silver to your portfolio or are looking to diversify your holdings, below you’ll find a number of different ways of increasing your exposure to silver.

1. Physical Silver

Buying physical bullion is a great way to get your hands on silver. After all, if the markets crash or the dollar tanks, silver is better than any fiat currency. When you buy silver bullion, you know exactly where your money went, and you have immediate access to it whenever you want.

When you buy physical silver, it’s going to cost you a little more than what you see quoted in the news. The price you pay to buy a physical ounce of silver over the spot price is called the “premium.”

  • Coins: Silver coins are the easiest way for investors to own physical silver. You can purchase silver coins that range anywhere from a half ounce to five ounces, to several dozen ounces.
  • Bars: Silver bars are a great way to buy silver if you want to purchase it in large quantities. A standard silver bar weighs 1,000 ounces, or 70 pounds. But silver bars come in all kinds of different sizes: one ounce, five ounce, 10 ounce, 100 ounce, 1 kilo, 5 kilo, and up. This allows investors—no matter how much money they have available to spend—to purchase silver bars.
  • Antiques: Visiting your local antique store or flea market is a great way to find silver. It might be old and tarnished, but chances are good you’ll be buying solid silver at close to the spot price.

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2. Silver Stocks

Another way to invest in silver is through silver mining stocks. Silver prices are cyclical; this presents good buying opportunities for investors who want exposure to silver stocks. Investing in silver stocks does not give you access to physical silver, but like the broader stock market, offers an excellent opportunity for serious growth that outpaces actual physical silver. On top of that, some silver stocks also provide dividends.

Here are a few silver mining stocks worth investigating.

Silver Wheaton Corp. (NYSE:SLW, TSE:SLW) is the world’s largest silver streaming company. Silver streaming is the process in which one company purchases a mining company’s production to refine and distribute the silver.

In 2016, a year in which physical silver prices advanced 15%, Silver Wheaton’s share price soared more than 50%. Silver Wheaton also provides an annual dividend of 1.19%, or $0.24 per share.

Pan American Silver Corp. (NASDAQ:PAAS, TSE:PAA) is one of the largest silver producers in the world and is working to diversify into gold. Pan American’s mineral reserves are estimated to contain 280 million ounces of silver and 2.1 million ounces of gold. Pan American Silver provides a modest annual dividend of 0.29%, or $0.05 per share.

In 2016, Pan American Silver’s share price soared 126%. (Source: “Pan American Silver Corporation Mineral Reserves and Resources,” Pan American Silver Corp., last accessed January 13, 2017.)

Coeur Mining Inc (NYSE:CDE) is the largest U.S.-based primary silver producer. Founded in 1928, the company has operations in North America, South America, and Australia. The company produces around 18 million ounces of silver and more than 226,400 ounces of gold annually with silver accounting for around three quarter of revenue.

In 2015, Coeur achieved record production of 35.6 million silver-equivalent ounces, a year-over-year increase of 11%. Production in 2016 is projected to be 34.4 to 37.0 million silver-equivalent ounces. Most of the bullion is sold to bullion-trading banks and to smelters. In 2016, Coeur’s share price climbed 330%. (Source: “Fact Sheet,” Coeur Mining Inc, last accessed January 13, 2017.)

Great Panther Silver Ltd (NYSEMKT:GPL, TSE:GPR) is primarily a silver mining and exploration company with activities focused in Mexico. The company recently announced an agreement to acquire a 100% interest in the Coricancha Mine Complex in the central Andes of Peru.

In 2017, the company expects to produce between 4.0 and 4.1 million silver-equivalent ounces from its Mexico operations. In 2016, Great Panther’s share price increased 225%. (Source: “Overview,” Great Panther Silver Ltd, last accessed January 13, 2017.)

3. Exchange Traded Funds

Exchange Traded Funds (ETFs) are an excellent way for silver bulls gain access to a wide number of different silver stocks. When it comes to silver exposure, there’s an ETF for almost every segment of the silver market: physical bullion, futures, and mining stocks.

iShares Silver Trust (ETF) (NYSEARCA:SLV) is the most popular way for investors to access physical silver. SLV holds 362.3 million ounces of silver in trust, with net assets of $7.0 billion. Its silver bars are held in vaults in London, England and New York City. (Source: “iShares Silver Trust,” iShares by BlackRock, last accessed January 13, 2017.)

Silver Trust (NYSEARCA:SIVR) is an ETF that also tracks physical silver bullion. SIVR has 19.3 million ounces of silver in trust, with $327.3 million in assets under management. (Source: “ETFS Physical Silver Shares SIVR,” ETF Securities, last accessed January 13, 2017.)

Global X Silver Miners (NYSEARCA:SIL) is an ETF that provides investors access to a number of popular silver mining, refining, and exploration companies from around the world. The fund has net assets of $318.2 million, and the top holdings include Fresnillo Plc (13.27%), Silver Wheaton Corp. (12.93%), Pan American Silver Corp. (11.25%), and Tahoe Resources Inc (8.78%). (Source: “SIL Key Features,” Global X, last accessed January 13, 2017.)

PureFunds ISE Junior Silver ETF (NYSEARCA:SILJ) is an excellent way for investors to get exposure to small-cap silver companies. The benefit to a junior silver play is that they could experience much higher growth rates than large-cap companies. They could also become an acquisition target. The fund holds 24 stocks, with total assets worth $58.5 million. The top holdings include Coeur Mining Inc, Pan American Silver Corp., First Majestic Silver Corp., Excellon Resources Inc., Fortuna Silver Mines Inc, Endeavour Silver Corp, and Mag Silver Corp. (Source: “SILJ,” Pure Funds, last accessed January 13, 2017.)

Final Thought on Silver Investing

2017 is poised to be a strong year for silver prices. Fortunately, there are a number of different ways for silver bulls to diversify their portfolios and gain exposure to silver.

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