Investing in Silver

Thythe · #1 07-23-2006, 05:47 PM

Sorry if this is a super newb post, but I've really done close to zero investing in my life (just out of school at 23, most of my money goes to loans). I've been reading a lot about investing in silver and was wondering what everyone thinks about it. This would probably be for the long term, at least 3+ years, but I would also be interested in the short term too. For those who think it's a decent idea, would you suggest buying physical silver, or investing in the new Silver Trust? Thanks.

Baulucky · #2 07-23-2006, 07:15 PM

Physical silver is a cumbersome commodity to buy or sell and or custody, specially in small quantities (small being less than a 5000 OZ ingot). I have not invested in trust type shares other than QQQQ or SPY, but I guess it'll be fine and liquid (need to check on liquidity).

If you don't mind the futures market, it's the most liquid form of investing in metals. There are some mini contracts available too and it's traded electronically thru your futures broker. (Or if you have an IB universal account you can do your trading there along with stocks in most major world stock markets). Check www.interactivebrokers.com for further info and a list of liquid tradeables worldwide. They pay interest too on surplus cash.

shark6 · #3 07-23-2006, 07:28 PM

For investment purposes, the ETF is the lowest cost and most liquid option for small investors.

With futures contracts you have higher commissions and options expirations to contend with.

Physical silver has high spreads on the difference between what you can buy and sell it for. I would only recommend the physical stuff if you think there is a risk that the US dollar will become literaly worthless.

mrbaseball · #4 07-23-2006, 07:59 PM

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(need to check on liquidity).

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I trade a lot of SLV (the new silver etf) as part of some of my arbs and it's got decent liquidity and pretty tight spreads most of the time. Not quite as good as GLD (gold etf) which is insanely tight and liquid but SLV gets better by the day in terms of tightness and liquidity and will continue so as it matures as it's still very new. But for an investor the spreads and liquidity are way more than adequate.