Since its discovery, people have used silver as a type of currency. They traded it, through jewelry, coins, ingots, and bars. Silver soon became an idea currency.
Traders still use silver as a type of currency, but, in addition to being able to buy silver in its metal form, they have more options to trade and invest in silver. Possessing silver physically as a metal is actually still one of the most popular ways to invest in silver.
Let's Get Physical
Silver Bullion -- Government and private mints make their own bullion, often in the form of silver bars or rounds. When an investor buys bullion, the purity of the metal -- what percentage of the bullion is actually silver -- is plainly marked. On the negative side, bullion prices are tightly aligned with the price of silver, rising and falling with the metal's price.
Silver Coins -- Silver coins are also available. These coins are often considered collectible, so there's a bit of insulation to silver price fluctuations. For instance, there's a chance that a good collectible coin may increase a little more if silver prices go up and not drop as fast, if the metal's price plummets. On the bad side, you may find it more difficult to know the purity of the silver in a coin.
Tip: If you are going take possession of coins or bullion, you may want to invest in one more thing: a safe.
Thanks to the wonderful world of online trading and advanced financial products, you don't have to buy actual coins and bars. You can invest through investment vehicles, such as silver exchange traded funds (ETFs) and mutual funds. Buying these products allow investors to quickly buy and sell their positions. However, some investors do not like non-physical possession because if you actually need the silver -- let's say there's an apocalyptic event -- then you are out of luck. Also, they complain that the companies that run the ETFs and mutual funds do not actually own the silver either, in some cases, and may play a little financial hanky-panky with your investments.
Another way to "play" silver, as the bigshot traders say, is through the stock market. For instance, you can buy stock in precious metal-mining companies. The stock's value is usually keyed into the rise and fall of the price of silver.
A Word of Caution
As always, be careful when you invest in silver. Like anything, prices of commodities can rise and fall, sometimes dramatically. Only invest money that you absolutely don't need, if you are considering any investment.
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