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Invest In Silver And Hedge Against Financial Calamities

Smart people invest in silver. Silver, like gold, is a "safe haven" for your money in times of trouble. It is portfolio protection. Silver is the poor man's gold. It is real money just like gold. In this article I will cover five ways you can invest in silver.



It isn't any secret that the Federal Reserve is trying to "stimulate the economy". They called it quantitative easing or QE1, and QE2 for short. In reality, they are devaluing our currency by printing more money. This leads to inflation and eventually currency collapse.

Back when our constitution was followed, devaluing our currency was difficult to do. Coins minted by the US government had to contain a specified amount of gold or silver as required by law. Thanks to President Nixon, our paper currency is no longer backed by gold or silver.

With the national debt growing without any restraint, it is only a matter of time when the effects will be felt by all. You can not go deeper into debt and remain solvent. Expect hard times ahead.

Preserving your retirement and net worth is difficult in the current state of affairs. Investing in silver is one of your options to protect yourself. Here are a few suggestions.

How To Invest In Silver

There are five ways to invest in silver. They are:

  • Buy silver bullion rounds or bars
  • Buy silver numismatic coins
  • Buy silver Exchange Traded Fund (ETF)
  • Buy silver stocks
  • Trade silver futures.

Silver Bullion

Buying physical silver bullion coins, rounds, or bars is a popular way to invest in silver. Silver bullion coins like the US minted American Silver Eagle or the Canadian Maple Leaf Silver Coins are just two coins that contain pure silver.

The American Eagle contains one troy ounce of 99.9% pure silver. This is the only silver coin allowed in an IRA. The Canadian Maple Leaf Silver Coin contains .9999 pure silver.

Private companies also mint pure silver rounds or bars. These have a lower premium over the spot price for silver.

If you own physical silver bullion, be sure to keep it in a quality safe that is bolted to the floor in a hidden location if possible. You could keep your silver in a bank safe deposit box, but there are stories I have read that report the US government confiscating coins because they said they were "abandoned" even though their owners stated otherwise.

Silver Numismatic Coins

US silver coins minted before 1964 contain 90% real silver and 10% copper. It is another great way to invest in silver. It is like holding history in your hand. A Morgan silver dollar minted by the Carson City mint between the years of 1878 to 1904 and also in 1921 contained silver from the famous Comstock Lode.

You will pay a premium for quality silver coins, especially for rare coins. Mint state coins graded by PCGS remove the doubt of a coin's authenticity and grade. You can safely trust PCGS graded coins. It is easy to buy them online, over the phone, or in person at coin shops.

Silver Exchange Traded Fund (ETF)

A convenient way to invest in silver is to buy shares in an Exchange Traded Fund like iShares Silver Trust (SLV:NYSE). ETFs are traded just like stocks. You will need an account with a broker to make trades.

The only negative is, you do not take physical possession of the silver you buy. You can own silver ETFs in an IRA.

If you would like to increase your leverage when buying a silver ETF, consider ProShares Ultra Silver (AGQ:NYSE). According to the Proshares website (www.proshares.com/funds/agq.html), "ProShares Ultra Silver seeks daily investment results, before fees and expenses, that correspond to twice (200%) the daily performance of silver bullion as measured by the U.S. Dollar fixing price for delivery in London."

This fund is very volatile. I have seen it move $30 per share in a day.

Silver Stocks

Silver mining and silver royalty companies also provide an excellent way to invest in silver. There are many silver mining companies whose shares you can invest in your IRA or brokerage account.

Hecla Mining Company (HL:NYSE) is one such company. Silvercorp Metals Inc (SVM:NYSE) and MAG silver (MVG:AMEX) are two other companies. These companies mine silver and have all the risks associated with mining operations.

Silver Wheaton Corp (SLW:NYSE) is the world's largest silver streaming company. For an upfront payment, they have the right to purchase some or all of the silver production from quality mines. The price of its shares are linked to the price of silver and can be volatile.

Silver Futures

Trading in silver futures on the commodity exchanges is a way to invest in silver. This method is not for everyone. You will need a brokerage account with a commodity broker such as MF Global formerly known as Lind-Waldock.

Since futures are leveraged trading vehicles where you only put up a small amount of money on margin, you can experience large gains or loses rapidly as the price of silver changes. One future contract controls 5,000 ounces and a mini-contract controls 1,000 ounces on the Chicago Board of Trade.

There are many ways for you to invest in silver. Some are safer than others, but all contain some risk. The greatest risk of all may be to not own any silver at all while your government devalues your currency and fails to cut spending.

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