How to Invest in Silver [2024] Silver Investing 101

The demand for silver has been rising in recent years. In fact, global silver demand is expected to rise by 1% this year. What’s more, silver can be used to diversify your portfolio, especially when stocks can be more volatile and subject to the whims of overall economic conditions.

Silver investing is one of the most popular ways to invest in precious metals, Let’s look at how to invest in silver and why it’s worth considering so you can determine whether it should be part of your portfolio.

What Is Silver Investing?

Silver investing is where you, as an investor, purchases silver in hopes that its value will grow over time. There are different ways to invest in silver — either by purchasing the precious metal and storing it, or by purchasing securities that invest in or produce silver. We’ll explore these options in detail.

Why Invest in Silver?

Silver is one of several alternative investments you could choose to diversify your portfolio. The relative stability of silver over time can help you protect your investment portfolio from the volatility of many stocks.

Some argue that since silver is scarcer and is needed in areas like electronics, it can hold onto its value even during more dire economic conditions. For example, stocks may fall in price during a recession while the price of silver may remain steady. Knowing how to invest in silver properly might also help you use it as a hedge against inflation.

That’s not to say that investing in silver is guaranteed to provide the returns you hope and is the best way to invest money. Like all types of investments, silver may or may not make sense for your portfolio.

How to Invest in Silver

An important aspect of how to invest in silver is knowing all the ways you can do so. The guidelines here can help once you’ve decided whether to purchase physical bars, silver funds, silver futures, or individual stocks. And of course, seeking the advice of a financial advisor if you want more specific guidance is always a good idea.

Investing in Physical Silver

You can buy a bar of silver, also called a silver bullion, from many reputable companies. While this can seem straightforward, it can get more complex in terms of how you plan on obtaining the physical silver and storing it.

Aside from buying the silver, you’ll also have to pay to arrange its shipment somewhere. Sure, you could store it in your house, but that’s not the most secure option. Plus, your homeowners insurance may not cover the amount you have in case of damage or theft.

Instead, some pay a fee to store it at a secure facility — many companies that sell silver coins or bullion also offer services for storing your silver.

Investing in Silver Funds

Buying silver funds means purchasing funds through a brokerage account that holds a number of silver mining and production company stocks. So even if you don’t buy physical silver, you may be able to diversify your portfolio by putting money toward companies that are more “stable” than others because of their involvement in the silver industry.

When buying funds, you can choose from mutual funds or exchange traded funds, or ETFs. These are similar securities with subtle differences, like when you can buy or sell.

When doing your research, be sure to check what is housed in each fund to determine whether it’s the best fit for your investments. Plus, check to see if there are any potential management fees — the higher they are, the less returns you could see. Seeing the historical returns could also be useful, but it’s no guarantee that you’ll earn similar returns down the line.

Investing in Silver Stocks

You can also purchase individual stocks of companies that are heavily tied to the silver market. For example, you can buy stocks in silver mining companies or in companies that produce or distribute the precious metals. In most cases, the company’s share price is tied to the price of silver.

That said, stock price can also be affected by the company’s overall performance and environmental factors. Meaning if a company sees a profit, share prices rise (and you may also earn dividends), and the opposite happens when a company isn’t faring well.

Since there is more risk with investing in an individual company, it’s a smart idea to do research and diversify your investments even more.

Unsure about where to buy individual stocks? Check out our Robinhood review to see whether this platform is right for you.

Investing in Silver Futures

Future contracts can be complicated, making this a more advanced type of active investing. If you’re willing to learn and potentially take on more risk (as mistakes can happen), it may be worth investing in silver futures.

With futures, you enter into a contract where you promise to buy or sell a certain amount of silver at a specific time in the future for a certain price. Basically, you as the buyer pledge a certain amount of money based on what you expect silver to be worth at that time. If you predict silver’s price movement well, you could buy low and sell at a profit.

Before trading with real money, consider practicing — many brokerages offer a futures trading simulator so you’re not on the hook for real money.

Commonly Asked Questions About How to Invest in Silver

How Can I Invest in Silver?

One of the most important aspects of knowing how to invest in silver is knowing the ways you can invest in this precious metal.

Some ways you can invest in silver include:

• Buying physical coins or bullion: You can purchase them from reputable companies, who can ship them to you or your secured storage location.
• Silver funds: Silver ETFs or mutual funds are a great way to diversify between companies that are heavily involved in the silver industry.
• Silver stocks: Buying individual stocks can be a great way to have more control over companies you want to invest in.
• Silver futures: An advanced trading tactic, futures contracts are where you commit to buying or selling shares of silver for a certain amount at a later date.

Best Way to Invest in Silver for Beginners?

The best way to invest in silver as a beginner is probably by purchasing silver funds. By choosing a mutual fund or ETF tied to the silver industry, you don’t have to worry about risking your investments with only one stock. In other words, it can be a better way to diversify your portfolio.

You may benefit from learning about investing for beginners in general instead of learning how to invest in silver to start. 

Should I Invest in Silver If I Don’t Make Much Money?

It’s possible to invest in silver if you don’t make much money. Many brokerages offer silver ETFs that may not have a high minimum investment amount. That being said, if you’re just getting started investing and don’t have a lot of funds, you may want to consider learning how to invest in stocks and investing in a broader range of securities, like funds that track a stock market index.

How Much Should I Invest in Silver?

The amount you should invest in silver will depend on several factors, including:

• How much you have to invest
• What fees you’re willing to pay
• The percentage of your portfolio you want to devote to silver

Since the amount will be different for everyone, it’s important to determine how much you can afford to invest overall, and not just in silver. Budgeting apps like Rocket Money can help you determine this. Then, see how much of your portfolio you want to invest in silver and go from there. A common recommendation for silver investing is around 5% of your portfolio.

Investing in Silver vs Investing in Gold?

Investing in either silver or gold is fairly similar, as many investors do so to help hedge inflation with a more stable security or find a way to better diversify their portfolio. You can even invest in silver or gold in the same ways — physical bars or coins, funds, stocks or futures contracts.

Gold is generally considered more stable, while silver may have more potential for rapid growth. Before investing in either, figure out what your investing goals are and which precious metal can help you reach them.