"A rich man thinks all other people are rich, and an intelligent man thinks all other people are similarly gifted. Both are always terribly shocked when they discover the truth of the world. You, my dear brother, are a pious man." - Strahd von Zarovich
A small percentage of asset allocation to commodities (i.e., 5-10%) which have historically been uncorrelated to stocks/bonds may reduce portfolio volatility. The counterargument for commodities is that the long run expected inflation-adjusted return is zero, and - for a supposedly lower risk investment - commodities on their own are extremely volatile. And silver is more volatile than gold, for example.
Before including commodities in your portfolio, you might want to carefully consider the risks.
However, if this is not a percentage allocation of your portfolio and you are intending to speculate on price, then I would encourage you to treat the funds you sink into silver in a manner similar to a trip to Vegas - don't bet more money than you can afford to lose.
You may wish to direct this inquiry to a dedicated investing forum.
The drawbacks of directly investing in bullion include 1) you pay a 10-20% premium over spot prices, 2) you still incur holding costs (i.e., secure storage), but don't have the same economies of scale as an ETF.
The drawbacks of an ETF are that 1) there is counterparty risk, 2) you can't take the bullion with you in the event of an apocalytpic event.
Other than the Silver Eagle coins, physical silver options include Canadian Silver Maple Leaf coins, silver rounds, and silver bars. Bars require a larger purchase, but the premium over spot prices tend to be smaller. If you are a survivalist, then coins might be your best bet as they would be most easily recognized as authentic by your bartering counterpart.
Having the silver in hand in 1 oz coins and 10 oz bars is ideal (even if you aren't a "impending downfall of civilization" prepper. I buy from a local place that has reasonable fees above spot price. A friend of mine has been buying and selling silver for some time and surprisingly still manages to spend/barter with his silver coins when he's in a pinch. The mark up on the nice coins (ie Silver Eagles) can be significant but I do love having a few.
I really don't know jack about ETF's but having paper stating you own silver is not the same as physically having it (obviously). It does require more work on your part (shipping, safe deposit box, safe, etc.). And you have to pay attention, I missed the boat when silver topped out. Similarly, I was out of town on work (in the boondocks) when it hit rock bottom so I lost an opportunity there too. I suppose that is one disadvantage of only dealing with commodities in a physical manner.
Any investments I make in silver/gold are separated from my other retirement/investment accounts. I do it mostly for my kids and I enjoy handling precious metals in the process.
Some of my family invests in Silver/gold and I don't like it for my investments as it goes up and down way to much. More countries are getting more product out of their mines, thus I question how long the high prices are sustainable.
I am more inclined to invest in Platinum or other rare earth minerals. They are becoming more in demand as manufacturing requires more sophisticated tech (rare earth needs). Silver and gold look good in hand for the preppers, but guns, food, gas, clean water, and ammo seem more viable for them.
I made a killing on rare earth and pulled out recently. Not liking the Obama economy projections and need cash for new job set up plans. This is just my opinion and you really should talk to a professional, but do so knowing that they WANT you to invest regardless of opinions.
I know the US mint sells one ounce coins for around $50 each.
Are there better options?
Before including commodities in your portfolio, you might want to carefully consider the risks.
However, if this is not a percentage allocation of your portfolio and you are intending to speculate on price, then I would encourage you to treat the funds you sink into silver in a manner similar to a trip to Vegas - don't bet more money than you can afford to lose.
The drawbacks of directly investing in bullion include 1) you pay a 10-20% premium over spot prices, 2) you still incur holding costs (i.e., secure storage), but don't have the same economies of scale as an ETF.
The drawbacks of an ETF are that 1) there is counterparty risk, 2) you can't take the bullion with you in the event of an apocalytpic event.
Other than the Silver Eagle coins, physical silver options include Canadian Silver Maple Leaf coins, silver rounds, and silver bars. Bars require a larger purchase, but the premium over spot prices tend to be smaller. If you are a survivalist, then coins might be your best bet as they would be most easily recognized as authentic by your bartering counterpart.
Having the silver in hand in 1 oz coins and 10 oz bars is ideal (even if you aren't a "impending downfall of civilization" prepper. I buy from a local place that has reasonable fees above spot price. A friend of mine has been buying and selling silver for some time and surprisingly still manages to spend/barter with his silver coins when he's in a pinch. The mark up on the nice coins (ie Silver Eagles) can be significant but I do love having a few.
I really don't know jack about ETF's but having paper stating you own silver is not the same as physically having it (obviously). It does require more work on your part (shipping, safe deposit box, safe, etc.). And you have to pay attention, I missed the boat when silver topped out. Similarly, I was out of town on work (in the boondocks) when it hit rock bottom so I lost an opportunity there too. I suppose that is one disadvantage of only dealing with commodities in a physical manner.
Any investments I make in silver/gold are separated from my other retirement/investment accounts. I do it mostly for my kids and I enjoy handling precious metals in the process.
I am more inclined to invest in Platinum or other rare earth minerals. They are becoming more in demand as manufacturing requires more sophisticated tech (rare earth needs). Silver and gold look good in hand for the preppers, but guns, food, gas, clean water, and ammo seem more viable for them.
I made a killing on rare earth and pulled out recently. Not liking the Obama economy projections and need cash for new job set up plans. This is just my opinion and you really should talk to a professional, but do so knowing that they WANT you to invest regardless of opinions.
Multiplayer Decks- Memnarch - Animar, Soul of Elements - Zur, the Enchanter - Atraxa, Praetors' Voice - Food Chain Tazri - Teysa Karlov
Modern BUMill and Bant Spirits.
Thank you Xenphire for the signature!
I collect real property and financial instruments. You can better play that game.