Gold has gotten a lot of attention in the media as a result of hitting record prices in United States dollar terms, while little attention has been given to the almost 90% return in the price of silver over the last year. There are four main methods by which an investor can take advantage of the close correlation between the price of silver and gold.
Physical Silver
The most direct way to invest in silver is by owning physical silver in the form of bars or coins. Silver bars can be purchased from a dealer or even on the Internet in sizes ranging from one ounce up to over 1000 ounces. Coins can be purchased in as little as a one-half ounce size up to five ounces. The everyday coins in circulation in the United States up to the year 1965 were made of 90% silver and can also be a great way to invest in physical silver.
Silver Exchange Traded Fund
Like gold, there is a silver ETF that purchases physical silver and stores it on behalf of the shareholders in the trust. The iShares Silver Trust (SLV) trades on the NYSE and was started on April 21, 2006. It currently holds over 300 million ounces of silver. There is slightly less than one ounce of silver for every share outstanding in the ETF. The price of SLV should therefore closely track the spot price of silver and is a convenient way to purchase and sell silver through an online brokerage account.
Stocks in Silver Miners
Another way to gain exposure to the silver price is through companies that mine silver. As the price of silver increases, the stock price of silver miners will often increase as well since the company should be able to realize increased revenues from the sale of silver on the open market. There is some risk specific to individual companies that can cause a company's stock to lose value even when the silver price rises.
Silver Futures
Futures contracts allow an investor to put up a small amount of money and yet control a large number of ounces of silver. The ability to put down a small deposit enables the investor to use leverage, which can either increase returns substantially but can also magnify losses. Futures contracts can also be traded through online brokers.
Investing in silver and making money through changes in the price of silver can be accomplished in several different ways. Each method has its own risks and benefits which should be considered when deciding how to invest in silver.
 | Learn how to buy silver as an investment, and you can diversify your portfolio with important precious metals. |
 | Want to know how to test silver? You can find out if you're dealing with a real, an alloy or a fake using several different methods. |
 | How is silver mined? Like other precious metal commodities, silver mining is a many-step process, including mining, processing and refining. |
Who discovered silver? The ancients were using silver for various purposes, so it is more a question of who discovered different ways to use silver. |
Where is silver found? Silver can be found in many different mines all over the world, but some countries dominate in silver production. |
