Why add physical silver to your precious metals portfolio?
When you think about precious metals investing, gold usually comes to mind first. But investing in physical silver can be an equally valuable investment, for several reasons:
- Real money — silver is a form of money that can be easily traded. It is real and tangible.
- Insurance — when markets are unpredictable, silver can provide some stability to your investments. It can be used as a form of insurance amid uncertainty.
- Inflation hedge — paper currency can be printed on demand and will lose value as more is printed. Silver is finite and retains its value, so it can protect against inflation.
You can invest in physical silver in many different ways, and each vehicle has its advantages and disadvantages.
Silver Exchange Traded Funds (EFTs)
Table of Contents
What is it?
A silver ETF is an investment in shares of a company that owns silver. It is a paper claim on a pool of metal owned by the fund.
Advantages
With an ETF, you can get in and out easily, so they are ideal for short-term investments and speculation. ETFs are great for people who want exposure to movements in the spot price of silver.
Disadvantages
ETFs fall short when it comes to long-term protection. An ETF is an IOU that could easily default.
ETFs are far oversold versus the amount of physical silver that they own. If investors wanted to take delivery all at the same time, it would break the ETF market — similar to a run on a bank.
There are massive counterparty risks when it comes to ETFs as well. This means that shareholders don’t actually own the title to the metal itself. When you own real silver, you remove all counterparty risk and get to the heart of why physical metals are a true store of physical value in a valueless world.
Silver Futures Contracts
What is it?
A silver futures contract gives you the right to buy or sell silver at a certain price in the future. If an investor buys contracts for silver, they are paired with someone who wants to sell contracts for silver.
Advantages
Buying futures contracts is best for seasoned speculators who understand how to navigate the complexities of spot prices and futures markets. If you know how to navigate technical trading, there is potential for huge gains on paper promises.
Disadvantages
For the most part, metals futures have less to do with true fundamentals and more to do with high-level Wall Street politics. And without understanding how to speculate, there’s a risk of massive losses.
Silver Mining Equities
What is it?
Mining equities are paper investments in companies that are extracting silver and other precious metals from the earth.
Advantages
Because silver mining is part of the broader metals and mining industry, it may not move in lockstep with other sectors of the economy. So silver-mining investments can help you add portfolio diversification.
Some silver mining stocks may pay dividends, which can give you a steady stream of income.
Disadvantages
Shares of a silver mining company are not actual investments in silver. They are investments in the company extracting silver.
Mining is a complex and challenging business that is subject to operational risks. Production disruptions, accidents, and environmental issues can affect the company’s financial performance and stock price.
If you want to have all the advantages of precious metals, such as security, privacy, and protection against bank failures and currency devaluation, it is much better to own the real thing.
Silver Coins and Bars
Real physical silver coins and bars are tangible and real. They are a form of money.
Advantages
Physical silver represents a safe haven for investment portfolios in uncertain times.
Silver is uncorrelated with stocks, bonds, and other conventional asset classes. So adding silver can strengthen any portfolio.
Silver has outperformed stocks since 2000. The price is currently far below its two previous peaks in 1980 and 2011. This means HUGE upside potential.
Silver investments safeguard against reckless economic policies and an ever-devaluing currency. In times of high inflation such as right now, silver can protect the value of your hard-earned money.
Demand for silver is high in many industries. Physical silver is a vital element in batteries, semiconductors, solar panels, and medical technology. The price of silver will need to adjust to rising demand.
The world is running out of silver. Silver is primarily traded in “paper” form: futures, derivatives, ETFs, etc. The silver price will need to rise precipitously to cover all paper claims as physical demand rises.
Disadvantages
You need a way to safely store physical precious metals if you invest in them.
You could use a safe deposit box for temporary convenient storage, but access to your metals could be limited or restricted. Vault storage is a safer, more secure solution.
Why invest in physical silver right now?
Silver is extremely undervalued compared to gold. Because of this, silver is likely to play an aggressive catch-up game in the coming years.
Gold is nearly at all-time highs, while silver still has yet to come close to the highs it reached during the financial crisis of 2008.
And while the timing of this move is obviously unknown, when gold breaks out past the pandemic all-time highs, silver is likely to follow.
Physical silver demand is growing by the day.
While the paper market may not yet indicate the coming silver wave, the physical market shows that investors are buying physical silver in massive quantities.
Silver has massive profit potential. It is an excellent inflation protection measure. It has massive opportunities for the gold/silver ratio for compounding ounces.
How to start investing in real physical silver
McAlvany Precious Metals offers COMEX and NYMEX-approved forms of physical silver, as well as other precious metals in coins and bars. Each account is personally managed by experienced advisors who can help determine which precious metals are right for your unique objectives.
McAlvany Precious Metals offers secure storage of silver and other precious metals.
You have the option to securely store your silver in the most reputable and reliable independent vault storage facility in the US. Your metals can be segregated or non-segregated, and our fees are very competitive. Storage is fully insured and not part of the US banking system.
Or you can choose to store your silver internationally in our high-security, segregated vaults in Zurich, Switzerland or Toronto, Canada. Fees are comparable to US fees, and the storage is fully insured.
When you buy silver and other precious metals through McAlvany, you are covered with our Triple Protection Policy:
- Guaranteed authenticity and grade of silver
- Guaranteed repurchase of coins at the same grade and prevailing market price
- All coins are personally inspected and individually selected by our in-house numismatist.
McAlvany offers zero commitment, no-obligation consultations with our expert advisors to help you find the right investment strategy.
To get started, contact us for a free consultation: 1-800-525-9556.
Download a copy of our Silver Investment report in PDF format below.
