In recent years, interest in silver has peaked at an all time high. In part, this is due to the use of precious metals in investment portfolios. As unanimously agreed amongst experts, precious metals like silver can be a smart way to diversify a portfolio.
Besides, precious metals are more accessible now than ever. Thus, investors are turning more and more to silver. In this article, we will briefly show a step-by-step demonstration on how to buy silver bullion. In addition, we will exemplify potential pros and cons of investing in silver.
What Is Silver Bullion?
You can invest in physical precious metals by purchasing bullion products. Silver in its physical form, as an investment asset, is called silver bullion. Experience shows that this is one of the best ways to invest in silver.
Silver is a tangible asset. This means that it has an intrinsic value based on its precious metal content. Its price is not determined by third parties or government authorities. Rather, silver’s value is based around trades occurring live during business days on mercantile markets such as LBMA and COMEX.
When interest rates are low and inflation is high, investors turn to precious metals, like silver, as a safe haven against fiat currency devaluation. Therefore, silver tends to perform well during economic downturns. For this reason, silver bullion is in high demand in recent years. Let’s take a look at the main mediums in which silver is usually available.
Coins are one of the most popular mediums of silver. They are backed by a sovereign government. This generally means that they have a face value and are considered legal tender in their country of origin. Silver coins offer some of the world’s top craftsmanship and purity. A notorious example shown in the pictures above is the American Silver Eagle coin. It is a favorite amongst collectors, and one of the world’s most popular bullion pieces.
Investors that look to maximize their investments often turn to silver bars. Bullion bars often have lower premiums than coins. Thus, it is possible to acquire more pure silver per dollar spent.
Bars are minted in different weights, such as 1 ounce, 1 kg, and beyond. In addition, silver bars offer great storage options. They are stackable and convenient to store in smaller spaces.
To put it simply, silver rounds are types of coins that are produced by private mints. As such, they are not considered legal tender, and have no assigned face value.
Silver rounds are minted in a range of different designs. Such can fit into customer interests or unique designs from the mint. In general, the price of rounds is tied directly to their silver content, the same way silver bars are. They are also easy to stack and could be a great asset for investment.
How To Buy Silver Bullion?
Physical silver can be purchased through bullion dealers and retailers. Online bullion dealers as well as brick-and-mortar shops are the prime alternatives for dealing with tangible silver. Online dealers have the benefit of easy access, as well as free browsing at any moment in the day. In addition, online dealers will typically be able to offer better prices. They simply have lower business costs to cover.
With that in mind, purchasing silver bullion takes only 3 easy steps:
Step 1 – The first step to buying silver bullion is simple. Browse your retailer’s website and simply shop. Add as many products as you wish to your cart.
It is worth mentioning that there are additional values and fees encompassed in the purchase of bullion products. The “premium”, as it’s called, is essential for these businesses to function and make their living. The premium is a percentage over the silver spot price for all individual products.
Step 2 – Proceed to checkout after adding products to your cart. Then, fill in your shipping information.
Investors should keep in mind potential additional delivery costs as well. Albeit, many dealers offer free shipping according to the size of a purchase.
Step 3 – Select your desired payment method. There are different options to choose from. Certain options may give you a discount over the total value.
It doesn’t take much more than that. After placing an order, buyers will receive an email confirming their purchase. It is a matter of waiting for their silver bullion to be delivered, from there on.
Is Silver Bullion A Good Investment?
If you are considering investing in silver, you can see that it is a rather simple process. However, most aspiring investors ask themselves what are the benefits of doing so. Let’s check out the possible pros and cons of buying silver bullion.
As mentioned above, silver retains its value regardless of someone else’s administration. This translates to having no counterparty risks embodied in owning physical silver. An investor’s holdings won’t be dealt in contracts or similar commitments. In addition, owning silver presents no default risks.
Besides, we mentioned that silver is a financial asset. In other words, it has value on its own. During periods of financial instability, of low interest rates and high inflation, silver has a tendency to perform well. This precious metal can be a smart way to hedge these potential downturns.
By contrast, some factors stand out as possible drawbacks.
Owning physical silver brings about the need for storage. Silver’s lower density means it occupies more space than other metals while weighing the same. Investors may have additional expenses for storage. It can be done on their own, at their house or another location. Another option are fully insured, non-bank bullion depositories. Bank safe deposit boxes might seem like a reasonable alternative. But the truth is, bank safes are counter-advised since not being FDIC insured.
Furthermore, storage, if done by the owner themselves, requires extra caution. Owning physical silver involves the risk of theft and poor conditions. Owners can take precautionary steps such as using a safe, as well as thinking outside of the box for hiding spots. In addition, silver needs to be stored in cool, dry, and dark places. This avoids sulfur vapor building up, which could tarnish your silver.
All things considered, you can buy silver through no more than 3 simple steps. The different mediums in which it is minted offers plenty of alternatives to choose from. Plus, many investors consider this investment avenue to have more benefits than drawbacks. Above all, be it in the form of coins, bars, or rounds, silver can be a savvy addition to a portfolio.
If you plan on investing in physical silver, make sure to follow the aforementioned steps. Make your purchases through safe, respected dealers, and enjoy physical silver bullion at its best.