Comparison of returns with silver and stocks. No matter how we look at it, stocks offer much more upward potential than silver or other precious metals over time. Precious metals such as silver have long been an alternative to traditional investments, such as stocks and bonds. When times get tough or the economy faces strong inflationary pressures, some investors turn to silver to hedge their bets or invest more defensively.
The two main ETFs that hold physical silver are iShares Silver Trust (SLV) and the Aberdeen Standard Physical Silver Shares (SIVR) ETF. Silver futures are an easy way to bet up or down the price of silver without the hassle of having physical silver. While it's tempting to diversify by investing in gold and silver mining stocks, it's important to know the associated risks. Investors like silver for many reasons, but many see it as a store of value in times of uncertainty, while others consider silver and other precious metals, such as gold, to protect against inflation.
Compared to other metals, there are relatively few industrial or consumer uses for assets such as gold and silver. This is something you don't have to worry about when you own physical gold and silver bullion and coins. While ETFs offer a more attractive 1-to-1 ratio to the prices of gold and silver, they have their drawbacks. On the contrary, when times are good, investors tend to take their money out of gold and put it in assets with greater ties to the economy in general.
If you don't want to directly own physical silver, but you also want a lower risk method than futures, you can buy an exchange-traded fund (ETF) that owns physical silver. You can buy silver through local dealers and pawnshops or from online retailers such as APMEX or JM Bullion. If you're interested in investing in precious metals, you might have considered investing in gold and silver mining stocks as an alternative to physical gold and silver bullion and coins. Traders can also bet on the silver market through an ETF that has futures contracts through ProShares Ultra Silver (AGQ), although it is better as a short-term bet than as a long-term hold, due to the structure of the fund.
Silver bars will tend to be safer and more stable, as there are fewer unknown quantities in this market. That said, silver investors often debate how best to include the precious metal in a portfolio: the generalized form of silver ingots or stocks that normally track the market value of the metal.