Silver is one of the most popular and versatile precious metals. The relatively low silver price makes it an excellent choice for investors who can’t afford gold. Right now, the spot price of silver is less than $20 per ounce, and this is highly affordable for almost every budget. There are three primary ways people invest in physical silver: Bars, coins, and collectibles. The best choice depends on individual investment goals and strategy.
Silver Bullion Bars
Silver bars are a good choice for people who want a large quantity of silver for the lowest possible price per ounce. Buying silver bars is the cheapest (per ounce) way to invest in silver because bars do not require as much processing as the alternatives. These bars trade strictly based on the weight of the metal they contain. On top of this, silver bars usually have the highest purity because they are made specifically for investment.
The downside of silver bars is that they are heavy and may be difficult to transport and store because of their large size compared to coins and collectibles. Also, while the value of silver coins and collectibles is determined by many factors, the value of a silver bar depends solely on the spot price of silver. This fact can be a positive or a negative depending on individual risk tolerance. As it stands, bullion is the best option for risk adverse investors who do not want to deal with the subjective elements of numismatic coin valuations.
Silver Bullion Coins
Bullion coins are another low-cost way to invest in silver. Like bullion bars, bullion coins are high purity and designed for investment. They are also affordable because they trade based on the value of the silver content in the coin. But unlike bullion bars, bullion coins are small, portable, and may have decorative designs that can add collectible value. Bullion coins are ideal for investors who want high-purity silver without the difficulties associated with large bars of metal.
The main downside of bullion coins is their small size. Because bullion coins are relatively small, it is hard to store a large quantity of silver in this medium. And it is difficult to keep track of exactly how much silver you have because counting all the coins can be a hassle. Investors who like the coin format but want to have more value per coin should look at numismatic coins and collectibles – these silver investments tend to hold more value per coin compared to bullion coins because their value comes from many factors in addition to the value of their silver content.
Silver Numismatic Coins
Collectible numismatic coins are one of the most popular ways to invest in silver, but the value of the coins has the lowest correlation with the silver spot price. These numismatic coins were typically minted a long time ago - back when silver was used in circulated money. For example, silver numismatic coins include the American silver half-dollar minted from the 1920s to the 1960s and several British coins minted prior to WW1.
The downside of collectible coins is that they are usually not made of pure silver and can be mixed with other metals. For example, British silver coins minted prior to 1920 contain 92.5% silver content and coins minted afterward only have 50% silver content. Thankfully, the value of silver numismatic coins is determined by many factors on top of the spot price of silver. These factors include rarity and historical significance. The downside is that these coins are typically much more expensive than the value of the silver they contain and prices can be volatile and subjective.