Should You Invest in Silver? Is Now a Good Time to Buy?

  • Precious metals are a good hedge against inflation and a good way to decrease the volatility of your stock portfolio.
  • Silver doesn't often have the same yield as stocks or other investments but it can.
  • You must decide whether or not silver is a good investment for you.

Precious metals have always been a popular investment among those looking for a hedge against inflation or for a way to decrease the volatility of their portfolios. Although silver is not commonly seen as a high yield investment, it can actually be quite profitable. If you bought silver in July of 2009, when it was worth around $13 an ounce, and sold it in April of 2011, when it was worth $47 an ounce, you would have pocketed a 260% return on your investment over 21 months.

Silver is a chemical element with the symbol Ag and atomic number 47. A soft, white, lustrous transition metal, it exhibits the highest electrical conductivity, thermal conductivity, and reflectivity of any metal. The metal is found in the Earth’s crust in the pure, free elemental form (“native silver”), as an alloy with gold and other metals, and in minerals such as argentite and chlorargyrite.

For a stock or other investment to have that kind return in that short a time period would be extremely rare and would often come with high risk. To be honest, this kind of return on silver is rare, but it does happen.

Silver prices, like the prices of other precious metals are rather loosely and often inversely tied to the health of the economy and the health of the stock market. Often when the stock market falls, or investors loose confidence in the market, silver prices tend to increase.

The two major questions involved in buying silver are “is now a good time to buy silver?” and “how do I buy silver?” The answer to the former is rather complex, and can not be answered with any more certainty than, “is now a good time to invest in this company?” or “is this a good time to buy real estate?”

The point is that investing in silver, like investing in anything, is speculative. There is really no way to know what the price of silver will be tomorrow. When deciding if now is the time for you to invest in silver, the best thing you can do is do your research. One of the best sites for looking at trends in the price of silver and other precious metals is jmbullion.com. They post real time updates on precious metal prices, give you information about how those prices are calculated, and give you information about investing in silver.

The earliest known coins were minted in the kingdom of Lydia in Asia Minor around 600 BC. Notable silver coins through the centuries include the Greek drachma, the Roman denarius, the Islamic dirham, the karshapana from ancient India and rupee from the time of the Mughal Empire, and the Spanish dollar. (Image: Trajan 103AD Silver Ancient Roman Coin)

On the JM Bullion website you can also track the price of silver back until June 15, 2009. There are plenty of other sites that can be used to track the price of silver, but jmbullion.com has a plethora of resources and information that can be invaluable to any prospective investor. From the data JM Bullion provides you can see that the price of silver has been steadily increasing since May 27th, but is still much lower than in recent years. Despite this information there’s no way to definitively say whether this is or isn’t a good time to invest in silver, that is a decision every investor must make for themselves.

The answer to the second question is much more straightforward. There are basically two ways to buy silver. Option one is buying physical silver, the other is through buying shares of silver ETFs (exchange-traded funds). Commonly, physical silver is bought from either a physical or online dealer. Physical dealers can include stores such as pawn shops, jewelers, or gold and silver dealers. Online dealers include sites such as apmex.com or jmbullion.com.

Whether you buy silver from a physical dealer or an online one you can expect to pay slightly above the spot price, or the price that you could likely sell the silver for. Dealers do this to ensure that they can turn a profit. One advantage to buying silver online is that online retailers often charge less on top of the spot price than physical stores. The extra amount charged can range anywhere from $.50 an ounce to $1.50 an ounce.

Often times some bullions or bars of silver will be more expensive than their counterparts of the same weight. This is often do to the rarity or desirability of the item. The extra amount you pay for these rarer and more desirable pieces is called a premium. The premium on a piece of silver often fluctuates independently of the price of silver.

Buying shares of silver ETFs is much like investing in stock. You are essentially buying a share of a fund that invests primarily in silver. You can most likely use whatever broker you use to buy stocks, such as TD Ameritrade, to buy shares of silver ETF’s.

No one can tell you whether you should or should not invest in silver, that’s a question only you can answer. Hopefully this article has helped you understand the world of silver investing and has helped you make a more informed decision of whether or not silver investing is right for you.

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Kyle Reynolds

I'm a young political activist who loves commenting and writing about politics and political trends. I love to write about the stories that interest and intrigue me and I love being able to get the writing out there and being able to see the reactions to my writing. 


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