How to Buy Silver
Do you know how to buy silver? This article will answer these two questions: "What types of silver can you buy?" and "Where do you buy it?"
What types of silver can you buy?
1. The Physical Metal Itself
For us working class people, there are 4 main forms of silver metal to invest in:
- Junk Silver Coins - General circulation coins. Minted by the United States government before 1965. Known to contain 90% silver.
- Silver Bullion Coins - Minted by governments, for example American Silver Eagles, Canadian Silver Maple Leafs or Austrian Silver Philharmonics coins.
- Silver Bars - For example, the most popular are the 1, 10, or 100 troy ounce (oz t) bars.
- Silver Rounds - Legally issued by private minters. They are not considered to be coins at all, by some, because they are not sanctioned as legal tender by any government.
2. Silver Related Financial Securities
There are 3 main ways to buy silver related securities:
- Individual Silver Related Stocks - For example Pan American Silver Corp (PAAS), Silvercorp Metals (SVN) or Silver Wheaton (SLW).
- Silver Trusts - A type of investment that invests primarily in raw silver assets (physical silver). Typically, each share of a trust represents a certain amount of silver, measured in ounces. For example iShares Silver Trust (SLV) or Sprott Physical Silver Trust (PSLV).
- Silver Mutual Funds/ETFs - For our purposes, collections of silver related stocks run by a manager. Shares of these funds are sold to investors. Shares of ETFs, or Exchange-Traded funds, can be traded on an exchange just like any stock. Mutual Funds can be bought or sold only at the end of the trading day (be sure to check your fund's prospectus for specifics). For example Global X Silver Miners (SIL) or iShares MSCI Global Silver Miners (SLVP).
Where do you buy silver?
1. Online dealers:
Buying online is a convenient way to buy silver. There are many reputable silver dealers to choose from. I have personally purchased American Silver Eagles from GoldSilver.com and Fidelitrade.com and would do so again. Both were competitive and professional.
2. Your local coin dealer:
You can easily locate a dealer in your area. Just google "coin dealer [your zip code here]". I found a local coin dealer by going right to the U.S. Mint coin dealer database - usmint.gov/bullionretailer. Just pick your state. They listed several coin dealers reasonably close to me.
Local Coin Dealer in Collingswood NJ
One good thing about using a local dealer is being able to deal face-to-face with someone. also, you can ask around and find out about their reputation, how long they have been in business etc. Also, if you ever find the need to sell your silver, your local coin dealer may be the most convenient.
3. On-line brokerage accounts:
You can of course buy silver ETFs and silver related securities through an on-line brokerage account. Picking an on-line broker is outside the scope of this article but I have a 401k through my company, Oracle Inc, at Fidelity.com. Their site is intuitive and it has lots of research tools.
Hopefully, this has given you a better idea of how to buy silver. Here are some additional things to keep in mind:
- You can buy physical silver - coins, bars or rounds.
- You can buy stocks, trusts or mutual funds/ETFs if you are unable or unwilling to store the physical silver.
- If you are new to silver investing, start with a core physical silver holding.
- If you live in the U.S. your initial purchase should include some American Silver Eagles. They are easily recognizable, and in a pinch, they are easily sold or bartered with.
- If you buy physical silver, have it delivered to you.
- Keep some silver in a place where it is easily accessible.
- Unless you are a coin collector, don't buy silver coins for their numismatic value. Buy bullion.
Related article: Why buy silver?