It’s been said that the U.S. avoided a recession in 2023. However, the outlook for 2024 isn’t expected to be any better, with experts forecasting a “soft landing” or mild recession. In response to the some would say “bleak” financial outlook, silver and gold are starting to see many new faces.
Since March of 2023, three significant banks have collapsed within the U.S. – Silicon Valley Bank, Signature Bank, and First Republic.
These are the largest American bank failures since the 2008 financial crisis. Together, these three banks held around $532 billion in total assets. Here’s the even crazier part: these three banks held more in assets than the 25 banks that collapsed in 2008.
People are adopting precious metals in droves to help hedge themselves against inflation. Silver is appealing due to its commercial use (medical industry, automotive, solar, etc.) and its lower barrier to entry. It’s also worth mentioning that silver has a long history of being used as real money, dating back to ancient Greece. More investors are beginning to see the pitfalls of the fiat monetary system (money not backed by a commodity), and in response are moving around their assets.
Silver Fraud is Nothing New
That said, the silver markets are ripe with con artists. Plenty of people have been burned, which is why it’s necessary to take extra precautions before making any type of precious metals investment.
In this blog, we’re covering the best and safest ways to buy silver.
Silver Bullion
Owning silver bullion is the most appealing and traditional form of silver investment. It’s satisfying, as people can watch their investment “stack” up in real-time, and it has real everyday use in trade, bartering, and liquidating. With significant quantities of silver, security may become an issue, but there are plenty of ways to minimize personal risk.
Bars, Rounds, or Coins?
In most cases, this is up to personal preference. The only common case in which pricing may differ is with U.S. mint coinage. There is a premium on these coins as they have government backing. It’s not recommended to be used as traditional currency, as the silver content is worth far more than the face value.
U.S. Mint coins aside, what’s the smartest and safest option? Bars or rounds? There isn’t much of a difference here, and again, it’s up to the buyer. With silver rounds and bars, the value is based on the precious metal content, making them the best bang for your buck compared to U.S. coinage. There are key differences to note when comparing bars vs rounds: sizing, functionality, and ease of use.
Silver coins come in different sizes (1/10 oz, 1 oz, 5 oz, 100 g, etc.), which makes them great for acquiring and selling a small amount at a time. For silver rounds, the largest commercial size is 10z. A 10oz round is a good chunk of metal, but it still comes nowhere close to the largest silver bars for purchase. Part of the appeal to rounds is the functionality, as they are easy and discrete to carry around. It’s possible for investors to commercially buy 1,000 oz silver bars (62.5 lbs.) but that’d make for a ridiculous-sized round.
In most cases, the bigger the round or bar, the better the price (bulk is cheaper). It’s important to have a goal in mind when purchasing silver bullion. Looking for the best price and store of value? It’d make sense to invest in a larger piece. Want faster liquidation and ease of trade? Rounds and smaller bars excel for this purpose. Also, smaller pieces make for great recurring investments.
Scottsdale Cast  100 oz Silver Bar
How to Buy Silver Bullion Safely
It may come as no surprise that counterfeit silver is not so rare. There are plenty of advertisers on Amazon, Facebook, Instagram, and other social media platforms selling fakes. In many cases, it’s quite obvious that these deals look a little suspect. It’s too good to be true. Advertisements such as “SILVER COINS 50% OFF” or “Get Six Coins for The Price of ONE” are usually hiding something. The silver market doesn’t function like a furniture store, precious metals have a set value no matter where they come from – that’s the idea behind a commodity. There are no blowout deals or liquidation events unless someone screwed up on the marketing side of things.
To be 100% safe and secure that you’re getting real silver bullion, it’s vital to buy from reputable dealers such as Scottsdale Mint. Trying to find a good price by purchasing silver on eBay or Etsy from resellers is a risky business, and not worth it. Any reasonable seller who knows what they have isn’t going to lose money by selling under the spot price. Sellers can claim to include a certificate of authenticity with their silver coins, but that doesn’t mean anything, as anyone can use a printer from the public library.
The Devil is in the Details
Watch out for “precious metals dealers” who are a bit more cunning with their words. Some companies use terms such as “nickel silver” (18% nickel, 62% copper, 20% zinc), it’s not a lie but the intention may be to fool unexperienced buyers. Also, it’s common to see copies of silver coins online, such as Buffalo or Silver Eagle replicas. For the seasoned coin collectors, it’s an obvious red flag, but there’s a reason these “replicas” exist… people are buying them. Also, in many instances, these silver coins are being sold as if the precious metal content and rarity are there.
The point can’t be hammered in enough, buying from reputable dealers is the safest way to buy silver bullion.
Silver Stocks
As with all investments, there are advantages and disadvantages to the stock market. With silver stocks, you get the ease of transaction, and ease of sale, and you don’t have to worry about protecting your assets (other than someone hacking your account). The downside is that the physical silver doesn’t belong to you. If the world gets turned upside down, there’s no selling or buying silver stocks, because it won’t matter at that point.
Silver ETFs
The upside of a silver exchange-traded fund (ETF) is that it operates like a pooled investment that can be bought and sold on the stock market. These ETFs track the silver spot price and allow investors to hedge themselves against inflation without holding silver bullion.
The largest and most popular Silver ETF, iShares Silver Trust, is managed by BlackRock. Yes, BlackRock, is the world’s largest asset manager.
However, for many buyers, much of the appeal to buy silver lies in the physicality of the asset.
Silver Mining Stocks
Silver miners function slightly differently than the physical silver market because multiple factors play into the stock price other than physical silver prices. In a majority of cases, as silver prices go up so does the production of silver mining companies. This also means more exploration and development of mines, which leads to a higher valuation and stock price.
Interestingly enough, unlike gold, silver is usually a by-product of mining other metals, such as gold, lead, copper, and zinc. Knowing this, it’s ideal to conduct thorough research to understand each miner’s composition before placing a bet.
Silver Mining ETFs
Rather than invest in a single company, silver mining ETFs (exchange-traded fund) offer the opportunity to invest in a broader range of companies. On one end, this usually means less volatility and less risk. On the other, the reward may be lower as there are usually no massive upswings or downswings in pricing, as ETFs are designed to not be so manic.
Another thing to keep in mind is ETFs can be weighted or unweighted. Weighted means the largest companies get a majority of the fund’s capital, whereas unweighted means the funds are uniformly spread across companies.
Silver Streaming Company Stocks
Commonly termed “silver steamers”, these companies finance silver miners in exchange for a portion of the metals mined at considerably less than the market price. In a lot of cases, the streamers provide an upfront payment to the mine, and in return receive a predetermined amount of physical silver at an agreed-upon price. The streamers then turn around and sell the silver to the market.
One of the upsides to silver streamers is they are subject to fewer operational risks than miners. Just because they are not directly affected by rising fuel and labor costs, there is still risk involved. Streamers can make for a great way to invest in the silver industry without owning physical bullion.
Silver Futures Contracts
Alpha & Omega Jesus Collection
These are contracts in which the buyer agrees to buy a specific quantity of silver from the seller at a predetermined price on a future delivery date.
The most common exchange to buy silver futures is through COMEX. They offer standardized contracts that vary in size:
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- Full (5,000 oz)
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- E-mini (2,500 oz)
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- Micro (1,000 oz)
The contracts are backed by physical silver, but most investors aren’t in it to buy silver, instead, they settle for a cash settlement. The appeal of silver futures is the ability to use leverage – there’s potential for a large return with a small amount of capital down.
In general, silver futures are not recommended for those new to investing. Potentially, there is more risk involved and it’s not as straightforward as say silver ETFs.
How to Purchase Silver Stocks Safely
To start, common sense will keep you covered in most cases. However…
Desperate times call for desperate measures, and it’s never been more important to conduct thorough research
Unfortunately, just because a company is part of the stock exchange doesn’t mean it’s automatically a safe bet. Take a look at Bre-X, a Canadian gold mining company that was valued in the multi-billions and traded on major stock exchanges. Long story short, it was a complete fraud. The stock collapsed, it was delisted from the stock exchange, and billions in investor capital went down the drain.
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- Do not invest in silver stocks over a cold call, email, or social media post.
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- If a profit is guaranteed and there are “no risks involved”, it’s likely a scam.
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- Do not make a decision based on speculation or hype (take note from Bre-X).
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- If any broker insists that you wire money and/or send money to a foreign country, there’s a chance it’s a scam.
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- If a broker is being very pushy – that is a red flag.
- Work with a financial advisor.
What is the safest way to own silver?
This can easily turn into a highly debatable topic for just about most investors, as there are varying opinions for the “best” option. Let’s be honest, no matter what, there is a level of risk with any investment. There are different forms of risk for each avenue, and each investor should consider that. Is it better to buy silver bullion coins and bars, or play in the stock market?
That’s up to personal preference and comfortability. “Safe” carries its definition for every investor. Some people rather hedge themselves against the fiat system, others are more comfortable investing within it, and many people dabble in both.
For those reading this, it can be assumed that you see and appreciate the value in holding physical silver.
The Argument for Physical Silver
One major advantage of silver is the credibility it has – it’s been a part of culture for thousands of years. It’s not going anywhere. It can be an absolute lifesaver in an emergency because everyone knows that it carries value. Silver can’t be created out of thin air as is the case with fiat money. It’s a real asset that can be held, and a majority of the population understands that.
For those who’d rather stay outside the major financial institutions, or at least protect a portion of their portfolio from it, physical silver makes for a great outlet.
Physical silver bullion can be stored at home, is easily used to barter with, and has a low barrier to entry compared to gold. It can’t be beat! Unlike ETFs, futures, and individual stocks, silver can’t be wiped out. It’s real money, it’s here to stay, and demand is only growing. As the financial landscapes shift, technology reaches more people (which needs silver to build), and the push to digitize the monetary system comes to fruition – the outlook for silver looks extremely positive.
Silver Beats CBDC
The push for a CBDC (Central Bank Digital Currency), which Janet Yellen has said is worth developing, creates even more of an argument to buy silver. Why? Well, with a CBDC the transaction system can be locked down if needed, and even done on an individual account level. Sounds a bit dystopian, right? This is what Agustin Carstens, Manager of the Bank of International Settlements (BIS) is quoted to say, “We don’t know who’s using a $100 bill today and we don’t know who’s using a 1,000 peso today. The key difference with the CBDC is the central bank will have absolute control [over] the rules and regulations that will determine the use of the expression of central bank liability, and also we will have the technology to enforce that” (link).
In layman’s terms, this is saying, “The money belongs to the central bank, and the central bank decides how it will be used”. There’s a slight disdain for cash in that quote because cash is uncontrollable. Silver is uncontrollable and carries its value.
Yet again, this is another reason to invest in physical silver. In the case of a fully digital transaction system, silver ETFs and stocks will be operating within that confine, but that’s not the case for silver bullion.
The argument for silver is real and only growing. Also, let’s not under-appreciate how nice it feels to hold silver.
Silver Investing: Looking to Get Started?
As mentioned above, silver isn’t going anywhere. With its growing industrial demand: batteries, dentistry, solar energy, nuclear reactors, touch screens, and the list goes on. As countries continue to develop, and technology becomes more accessible, silver will likely remain a hot commodity.
For those looking to buy physical silver, the Scottsdale Stacker offers a great place to start.
The Stacker is neither a coin nor a bar, it’s in a class of its own. With its ultra-high relief the Stackers perfectly, as the name implies, stack on one another. It gets even better, the 2oz, 5oz, and 100g Stacker rounds interlock with one another. This is perfect for the investor looking to take full advantage of their available space. Also worth mentioning, the Stackers look stunning.
Here’s what Bronson B. had to say:
“As soon as I handled the 2 OZ Stacker Round I was impressed and blown away by the perfect weight and sheer sturdiness of these rounds, feels solid and heavier than I expected. Engravings are flawless, just so clean, and well-machined. I can’t wait to Stack more.”
Ready to start stacking?
