Ways to Buy Silver

Silver is my preferred metal of investment. I'll elaborate more on the reasons in future posts. This post is just an introduction into the ways one can own silver as a way to diversify their investments.

There are quite a number of ways to start buying silver if one is interested.

Here's a quick list of them.

1) iShares Silver ETF (SLV)

Pros:
Very liquid; trades like a stock
Buy & Sell online
No storage cost & maintenance fee

Cons:
May not be backed by physical silver
Dependent on US timezone to buy or sell as the SLV is traded on the NYSE
Traded in US$

2) UOB Silver Savings Account

Pros:
Liquid
Bought & sold in S$
Singapore timing

Cons:
Must head to the bank to buy or sell
Bank does not store physical silver. It's all paper silver.

3) Physical Silver

Pros:
Security that you own the "real thing".

Cons:
Storage cost unless you store it at home
Illiquid
Risk of scams depending where and who you bought it from especially if 1) you can't sell it back or 2) are not holding and storing the physical metal yourself

4) Mining Companies

Pros:

Magnified price increase compared to the above 3 when price of silver increases.

Liquid

Cons:

Magnified price drops when price of silver drops.
Must research what percentage of revenue does silver make up

5) Silver Futures

Pros:
Liquid
Leverage - chance of making more money than the previously mentioned methods

Cons:
Leverage - Risk of losing more money than you have

For Singapore citizens, my suggestion would be to start a UOB Silver Savings Account. Though a little inconvenient to get to the banks, before 4pm (weekdays) or 12pm (weekends), and waiting in the queue to buy silver, this method eliminates the currency spread and brokerage fees per transaction. Especially useful if you're planning to do a monthly dollar-cost averaging investment for the long term and if you are investing in small amounts. Each transaction is subject to the minimum of 10oz, which at the current price is a total of S$361. (The daily price of gold and silver at UOB can be found here. This link can also be found at the bottom right of this blog under the Precious Metal section)

I also like the idea of owning physical silver. It's nice to admire a collection. =) But unfortunately, owning physical objects here seem to result in unbelievable premium prices above spot price. Also, there are a lack of sellers of physical silver. The only one I know of is Silver Bullion, which gets its silver from the Perth Mint, which also results in seriously huge price differences. GST also doesn't help, I'm sure you all would agree.

However, for non-Singapore citizens, my choice would be either the ETF or owning the physical. Your banks too, may have their own silver programs/products that you could invest in. But of course, I wouldn't know what other options are available in your country. Therefore, doing more research would be needed as the information here is probably incomplete.

Till next post,
~K