Investing In Silver: Guide for 2021

Investing In Silver: Guide for 2021

Joshua McMorrow-Hernandez
Published: March 10, 2021
Updated: August 30, 2021
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In this article, we’re going to break down the following:

  • some of the major determining factors behind investing in silver
  • reasons to invest in silver
  • how to buy silver for your portfolio
  • other things you should know as you embark upon your journey with this popular metal

You may have thought about investing in silver and wondered if it’s the right thing for you in 2021. We're here to answer all of your questions about buying silver.

Of course, the decision to make any investment is contingent on what you can afford, your risk tolerance, your short-term and long-term financial goals, and your asset preferences, among other matters.

Should You Invest in Silver?

Summary: There are important questions to ask yourself before jumping into the silver market.

Silver enjoys a lot of media attention. It’s a well-known and useful metal found in everything from coins and jewelry to medicines and electronics. Its uses as an industrial metal are almost endless. Silver is widely traded in precious metals exchanges. Its market price (spot price) is something that investors keep track of minute by minute.

Best Silver Bars (1)

Assorted silver bullion bars.

The question is, “what about you?” Should you join the ranks of silver investors and buy silver for your investment portfolio? Is silver a good investment?

Before hopping aboard the silver train, here are some essential questions you’ll want to answer, including:

  • Do you have money to invest in silver? It’s one of the lowest-priced precious metals, but investing in a lot of silver can add up quickly.
  • What are your investment goals? Are you looking for short-term flipping or long-term appreciation?
  • Where do you plan to store your silver? You can hold your physical silver in a personal vault, or you may choose offsite storage at a bank safety deposit box or bullion depository.
  • What will you do if silver prices suddenly rise? Drop? As with any investment, you should plan on when you will decide to buy more or sell some or all your holdings and what those buying and selling factors will look like.

Answering these questions ahead of time will help you be a more confident investor if you go in with a solid, well-informed plan.

Reasons Why to Invest in Silver in 2021

Summary: Physical silver investments are a simple introduction to investing in commodities. Silver is also relatively inexpensive and highly versatile.

Why do you climb a mountain? Many will answer, “because it’s there.” That’s often the reason a lot of people invest in silver, too. That, or because a friend or family member is, or because they think they should. But there are many—and much better—reasons to invest in silver. Let’s consider a few of them.

  • It’s easy to invest in silver – It really is! Many investments, such as stocks and bonds, require much documentation to transact, have steep tax implications, and often require the use of a broker to buy or sell. But silver is something you can invest in as easily as you might buy a book from a website or a piece of clothing from a department store. There’s little fuss or muss when it comes to buying or selling silver.
  • Silver is inexpensive – As compared to the price of gold or platinum, silver is inexpensive, costing only a few percent, more or less, of the prevailing price of those more expensive metals. This makes silver a fantastic value play regardless of one’s income level or investment budget.
  • Silver is versatile – Many call silver “the poor man’s gold,” but that half-true buzz phrase greatly minimizes silver's reach and capability while undeservedly cheapening its image. Many of the world’s wealthiest investors buy silver because it has such a large crossover market between recreational, art, and industrial sectors. According to Statista, nearly two-thirds of the silver demand in 2019 and 2020 went to fulfilling various industrial uses, including photography, photovoltaic applications, medical needs, and other sectors. This industrial demand, combined with silver usage for silverware, coins, and investment, means there are plenty of people who want—and need—silver.
  • Silver is a gateway commodity into other areas of investing – Perhaps you've wanted to try your hand at investing in hard assets but were intimidated about doing so. Silver may be one of the very best introductions to trading physical commodities. You can get started at a low price entry point and see how well you like it. If your experience with silver is positive, you may be inclined to try investing in more expensive metals, such as gold, platinum, and palladium.

It's easy to add an allocation of silver to an existing investment portfolio of equities, real estate, bonds, or other securities. Holding silver in your portfolio, even in modest amounts, can improve the overall liquidity and risk profile of your investment mix. Silver's price performance also tends to do well in an environment of low interest rates, which we are currently experiencing.

You will get the most out of your journey in buying and selling silver if you do so as an informed, educated investor. Be sure you're aware of both the risks and benefits behind any investments by consulting balance independent financial advice.

silver eagle coin collection

Silver Eagle coin as part of a collection.

How to Invest in Silver

Summary: The main types of silver investments are physical bullion (coins, rounds, bars), silver ETFs, silver mining stocks, and silver futures contracts.

One of the most common ways people are buying silver is through coin dealers and bullion brokers. These individuals and companies sell silver coins, silver rounds, and silver bars both in brick-and-mortar stores and online, making it easy to buy silver no matter how you prefer to do it. Bullion dealers guarantee the 99.9% pure silver content of their bars and coins.

Most silver dealers accept cash, checks, credit cards, wires, and cryptocurrency. This gives investors plentiful options to pay for silver in the method that best suits them. The transaction is literally as easy as selecting the silver pieces you want, paying for them, and either taking them home with you from the store or receiving your silver products in the mail if buying them online.

If you’re buying silver as part of an individual retirement account (IRA) or elect to have the silver stored someplace else, it’s best to ask the silver dealer what he or she recommends for offsite storage. Some precious metals dealers have qualified bullion depositories (vaults) they work with directly.

Other Forms of Silver Investment

Summary: The primary forms of "paper silver" are ETFs, mining stocks, and futures contracts.

Aside from physical silver bullion, many investors also choose to trade silver mining stocks or silver ETFs (exchange-traded funds). The latter are silver derivatives—financial vehicles that track silver prices. Mutual funds, financial advisors, and asset managers often hold ETF shares as a convenient way to get exposure to silver in their asset portfolios without having to hold the actual metal.

Sometimes you will also hear these referred to as ETNs, or exchange-traded notes. The iShares Silver Trust (SLV) and the Aberdeen Standard Physical Silver Shares ETF (SIVR) are the best-known silver ETFs.

Silver mining stocks (or "silver stocks") are shares of companies involved in mining silver around the world. Most newly-mined silver actually comes from copper mines and gold mines. However, there are still a handful of firms that make silver mining their primary focus. You can even find silver miners ETFs that bundle together shares from many different global silver miners. Some of the top silver mining companies are First Majestic Silver and the silver streaming company Wheaton Precious Metals.

Remember: silver mutual funds, ETFs, and mining company stocks don't entail buying actual silver. There are many ways to hold silver in your portfolio, but the bottom line is that only buying silver bullion gets you the real metal itself.

Another option is silver futures contracts. These are mainly held by large institutions and operate somewhat like the stock market. If you buy silver futures, you are committing to a bulk amount of silver of 5,000 troy ounces. For this reason, most "paper silver" contracts are settled in cash rather than actual delivery of silver. Retail investors generally have better flexibility with pure silver coins such as the one-ounce American Silver Eagle coin or Silver Canadian Maple Leaf.

Find out more about the best silver coins to buy with our helpful guide.

Silver Bullion Bar

Example of a silver bullion bar

More Tips About Silver Investing

Yes, silver is a valuable commodity and relatively inexpensive to buy, and, sure, you can buy it pretty easily to boot. But there’s more you need to know about investing in silver. Here are some important things you need to remember about buying and selling silver.

Refined silver bullion generally comes in three forms – If you want to hold physical silver, owning silver bullion is the best way to go. There are three major types of silver products for bullion investors: coins, rounds, and bars. Bullion bars are usually the least expensive form of silver, gram for gram. At the same time, rounds and coins may cost more but have notable artistic and collectible merits. Meanwhile, silver bullion coins like the Silver Maple Leaf offer something rounds and bars can’t—legal-tender status. Coins, rounds, and bars each have their unique sets of advantages, and it will behoove you to research what these are and how they benefit you.

Be smart about who you buy from – A lot of investors want to buy silver cheap with the hopes of out-gaming the metals market and gaining some monetary advantage they think nobody else knows about. This is exactly the wrong and one of the most dangerous ways to buy silver. Beware of backdoor deals that seem to be offering silver below spot value. These are almost always schemes involving fake or stolen silver, and you’re going to lose out big time if you fall for these scams. Don’t overpay for silver, either. Know what the prevailing price of silver is per ounce before you buy and educate yourself on what certain silver items are supposed to cost. Buy silver for fair-market value from legitimate, reputable dealers, and you’re going to be okay.

You’ll win some; you’ll lose some – Don’t get too wrapped up in the hype about silver price rises “going to $500.” There’s no such thing as a guaranteed investment. And while investing in anything—including silver—is a gamble involving risk, precious metals are often a pretty safe bet. Silver has been treasured as a commodity for some 5,000 years and has outlasted virtually every type of money known to humans. Empires rise and fall, yet silver keeps humming along. A limited resource, silver will always be valuable to art, industry, and humankind.

Follow the link for more information about the best way to buy silver.



The information in this article is intended for educational purposes only. It is not intended as investment advice. Consult a financial professional before making any investment decision.

Joshua McMorrow-Hernandez is a journalist, editor, and blogger who has won multiple awards from the Numismatic Literary Guild. He has also authored numerous books, including works profiling the history of the United States Mint and United States coinage.

More information on owning physical silver and investing in bullion from Gainesville Coins:

Silver Eagles For Sale

Beginner's Guide to Investing in Precious Metals

7 Benefits of Investing in Precious Metals

Investing in Gold: What You Need to Know

Investing in Platinum - Everything You Need to Know

Gold and Silver IRA Guide

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