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May 31, 2011

4 Most Popular Ways To Invest in Silver

Wondering how to buy silver? Silver has been one of the best investments of the past decade - and many experts believe the bull market is just getting started.

So how do you invest in silver? This article will lay out 4 popular ways to invest in the white metal with advantages and disadvantages to each.

#1 Buy Bullion Coins :-

Similar to gold coins, you can also buy silver bullion in coin format. These coins are minted by various governments and are basically bullion in coin format. As such you'll usually pay the current spot price of silver plus a small premium.

Popular silver coins include the US Eagle, the Canadian Maple Leaf and the Austrian Philharmonic. One advantage to these coins is that, like gold coins, they are easily recognized and can be traded easily for cash or other goods.

You can buy silver coins from several online dealers. Just make sure they are BBB-accredited with plenty of history selling precious metals.

#2 Buy Bars :-

Silver bullion bars are another way to invest in physical silver. You can buy bars and take physical delivery of them or you can even have them stored in a vault.

The advantage to bars is that they tend to have lower premiums than coins - so you get more precious metal for the money. Plus they are very cost effective if you plan on buying lots of the precious metal.

#3 ETFs :-

You can also invest through silver ETFs like SLV. These generally track the price of the precious metal. However some experts caution that these are paper and may not be actual physical bullion so there are risks involved here.

#4 Mining Stocks :-

You can also invest through mining stocks that mine precious metals. The theory is that as the metals rise in price, the profits of your stocks will also rise and hence the stock prices rise.
However, just like any stocks, these stocks also have inherent risks that are not just tied to the spot prices of precious metals. 

For example, you're also exposed to management risks, risks of expropriation, etc. Also, these stocks tend to be even more volatile than gold stocks. So be very cautious, talk to your financial advisor and do your homework before you invest.

So those are some tips on how to buy silver. Each one would suit different types of investors and their goals. Other ways would be futures and options, rare coins and even precious metals mutual funds. However these can be very risky ways of investing that are best left to professionals.

Regardless, if you do choose to buy silver, do your homework first, know your personal investing goals and learn what to expect before you buy.

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