Buying And Owning Silver Part 2: Specific Investments In Silver

Ben Krammer-Miller | Seeking Alpha

This article continues Buying and Owning Silver Part 1: Arguments for Silver Ownership, in which I establish a bullish case for silver. In part 2 I present specific ways to buy silver. Each of these options will appeal to investors with varying appetites for risk.

Silver Itself

The option with the lowest risk would simply to buy silver itself. This in itself sounds simpler than it really is. There are various coins, bars, bullion vaults and ETFs available to investors. Each varies in terms of their relative availability to investors, their tax consequences, and their counter-party risks. Unfortunately none of these is risk free, and consequently diversification is the best option.

The easiest way to buy silver is probably to buy bullion coins (American Silver Eagles, Canadian Silver Maple Leaves … etc.) or bars/rounds (NWT Mint bars, Pan American Bars…etc.). Investors who are looking for a lower cost option should consider junk silver coins. Junk silver coins are dimes, quarters, dollar coins and half dollars made before 1965. These coins contain 90% silver and the premium one pays over the spot price is substantially lower for junk silver than for bullion coins, bars, and rounds. Investors should be prepared to store physical assets in a safe place such as an at home safe. The primary risks here are theft and government confiscation, although unlike with gold, silver has never been confiscated by the U. S. government.

If one wants to hold silver bullion coins or bars in a bullion vault, they should be stored in a bullion vault in an account that allows its clients to take delivery of their silver. Absence of such an option should be viewed with suspicion.