Gold has been the traditional go-to for investors seeking the financial safe haven of hard assets, but silver is gaining ground due its rising role in industry.
Today, more than half of the silver mined is used for industrial applications like medical and dental equipment, electronics, solar panels, and more. This growing demand combined with its relatively low price make silver an attractive investment for those looking to get into the precious metals market.
Another benefit of silver is that its price volatility makes it possible to earn short-term profits. If you play the market right, you can see quick returns in a short amount of time.
This buying guide explains how to get into the silver market: the best place to buy silver, the pros and cons of different types of dealers, what to look for (and look out for) when investing, and more.
Not all silver offers the same benefit to your investment portfolio, so it helps to know exactly what you want to buy before finding the best place to buy silver.
Real, physical bullion offers physical ownership and no risk of default. That’s why we recommend buying silver coins or bars rather than ETFs, mining stocks, or silver certificates.
When you buy silver, the dealer’s ask price will be the current spot price plus a premium, which includes the costs of minting, distribution, and the dealer’s profit.
Premiums for bullion are higher than for paper silver… and you must arrange for safe storage or pay for delivery. But avoiding the risks associated with paper proxies is worth the extra investment (Read more on that in our article “Should I Buy Paper Gold or Gold Bullion? A Veteran Insider Offers Pros and Cons of Each”).
Finding the best place to buy silver is about more than just comparing prices. Getting a low premium is important, but you should look at a few other factors.
Investors who are new to the market can make easy targets for dishonest sellers. Precious metals dealers are not regulated, so it’s important to know how to avoid getting ripped off.
Identifying a trustworthy seller isn’t difficult when you know what to look for. This checklist can help you weed out those dealers that you don’t want to do business with.
Make sure the dealer you choose:
✔ Is educational, not pushy.
The best place to buy silver is from a dealer that is happy to answer your questions about the products you’re interested in. A good dealer will educate you and assist you in finding the right products for your investment needs… and will not use high-pressure sales tactics to close the deal.
✔ Doesn’t try to steer you into products besides bullion.
A good dealer will sell you what you came to buy; shady dealers will push products that have higher markups regardless of what you’re shopping for. Don’t be lured by offers of coins at 1% over spot… if a deal seems too good to be true, it probably is.
✔ Has a buyback policy.
Ideally, your dealer can guarantee that it will buy back any precious metals it sold to you in the future. Some dealers charge a fee for this, but others don’t. Always get the buyback policy in writing.
✔ Guarantees you can take physical delivery at any time.
An online dealer should guarantee it can fulfill a silver delivery request at any time. When working with a new seller, you may want to place a small order for delivery to be sure you’ll actually receive the product before making a large investment.
There are a number of options with regard to where to buy silver bullion. Here’s a basic rundown of each.
The best place to buy silver if you just want a few coins to have on hand for an emergency is a local dealer.
Your local coin shop offers the opportunity to form a face-to-face relationship with a dealer, which can help with negotiating things like buyback prices. It also offers the convenience of being able to go home with your metal in hand.
The main disadvantage of doing business with a local shop is that the premiums you’ll pay are typically higher (even when you include shipping and insurance costs) because the business owner has overhead costs to recoup.
If the premiums at brick and mortar stores are higher than you want to pay, don’t even waste your time buying silver that you see advertised on television and radio.
Air time and celebrity endorsements don’t come cheap, and those inflated overhead costs trickle right down to the investor.
What’s more, their salespeople often try to steer you away from silver bullion into products that have an even higher markup (but not as much investment value), and you’ll face lots of hidden fees and interest charges if you’re not careful.
In short, the best place to buy silver is not from a radio or television advertisement.
If you’re new to the precious metals market, eBay is generally not the best place to invest.
Although there may be no sales tax on your purchases and you can often get free shipping, it takes experience to recognize a good deal—and there are a lot of scams out there.
If you do decide to shop on eBay, you will probably pay a lower premium than you would at your local coin shop. But avoid buying silver by bidding at auction… it’s easy for sellers to create fake bids to drive up prices.
Play it safe: only make purchases when there’s a “Buy It Now” or “Make Offer” option.
Gold and silver expos are great if you enjoy collecting coins as a hobby, but they aren’t the best place to buy silver bullion. We recommend making your investment elsewhere.
Knowledgeable investors usually choose to buy precious metals online.
The prices are lower than local shops, and the convenience of 24/7 ordering and account management can’t be beat.
The best place to buy silver is from an online dealer that offers a wide range of services, like third-party storage, a mechanism for dollar-cost averaging, and varied account types.
Here’s why that’s important:
|Dealer service||Why you want it||What to look for|
|Buy-and-store program||Saves time and trouble of sourcing a dealer and coordinating delivery.||Fully allocated metal held by a third-party custodian, not the dealer itself.|
|Dollar-cost averaging program||No need to chase the market: average price paid over long term on par with/or on low end of trading range.||Option to automate purchases rather than having to place each separate order yourself.|
|Various account types||Greater flexibility in what you can do with your investment. Potential tax advantages.||Precious metals IRA programs, UTMA accounts, business accounts, and more.|
From bait-and-switch tricks to telemarketing rip-offs, there are lots of ways for a dishonest seller to bilk investors out of hard-earned savings—and not just in the gold market. Silver investors need to be wary of the scams out there, too.
Here are the most common ploys to avoid:
It’s not uncommon to see spreads (the difference between the buy and sell price) of greater than 30% on sovereign silver coins produced by well-known mints of the Canadian and British governments. These items should be viewed more as collectibles than investments.
One of well-known dealers we’ve recently reviewed, was selling a 1.5 oz silver Canadian SuperLeaf coin for $46, when the spot price per oz was $17.90. It was buying the same coin back at $29.88.
An investor would have taken an immediate 35% hit upon buying this coin and selling it back to the same dealer. Pay close attention to both the buy and sell price. Spreads will be larger than gold coins, but should generally not be greater than 10%, and usually less.
If someone offers to sell you bullion for less than the spot value of the precious metal content, it’s either fake or stolen. There’s no logical reason anyone would sell silver for less than the spot price.
When was the last time someone cold called you with a good offer? Telemarketing companies are never the best place to buy silver. If you pick up the phone, you’re likely in for a high-pressure, too-good-to-be-true sales pitch. Do yourself a favor and avoid doing business with a company you haven’t had the opportunity to research first.
Unscrupulous dealers will often advertise an unusually low price to lure you in then try to sell you something else at a higher premium—usually numismatic coins. If you’re looking for silver bullion but are pressured to buy collectible coins instead, find a different dealer.
Reputable sellers will fully disclose any fees related to your purchase up-front. The shipping, insurance, and delivery fees should be clearly listed and easy to find on their website, and there should be no surprises when you place your order.
If a dealer quotes an excessively long delivery time, that’s a red flag. You should expect delivery within 7 business days—15 total days at the absolute most. The Federal Trade Commission stipulates that companies cannot accept orders if they can’t ship the metal within 30 days (orders that take longer to deliver can be considered a futures contract).
It is wise to hold both gold and silver in your portfolio, and investing in physical silver bullion purchased from an online dealer that offers storage, a dollar-cost averaging program, and a number of different account types will ensure that your investing needs are met now… and for years to come.
Download Investing in Precious Metals 101 for everything you need to know before buying gold and silver. Learn how to make asset correlation work for you, how to buy metal (plus how much you need), and which type of gold makes for the safest investment. You’ll also get tips for finding a dealer you can trust and discover what professional storage offers that the banking system can’t. It’s the definitive guide for investors new to the precious metals market. Get it now.
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