Ways to invest in gold and silver

Gold and silver have historically been the safest, most conservative form of investing in an individual’s investment portfolio. Until recently, precious metal investments made up between 5-8% of a person’s holdings. Now, the average is less than 1%. Today, there are more ways than ever to invest in gold and silver. 

Invest in Physical Gold and Silver Metal

One way to invest in gold and silver is to buy physical metal. In other words, actually attaining gold and silver coins or bars. The old, pre-1965 dimes, quarters, half dollars, and silver dollars are known as junk silver, but they are not junk. They are 90% silver and a great way to purchase well-recognized silver. Gold coins were used in the U.S. up until 1933 and were 90% gold. This is yet another way to invest in history, and in metals.

Many governments across the globe mint gold and silver coins. For example, in South Africa, it’s the Krugerrand.  In Austria, it’s the Austrian Philharmonic. In Canada, it’s the Canadian Maple Leaf. And in the United States, it’s the gold and the silver Eagle.

You can also buy gold and silver bars or generic coins/rounds made by various refineries and mints. Some of these may be sold as collector’s items and have a high premium. Others are more generic and should have a lower premium than government issued coins.

And – sidenote – there are three different ways to store your metal, which include:

  1. Unallocated – This is where you are investing in a pool of raw gold and silver held at a storage facility. When you are ready to claim you metals, they need to be minted into coins or bars.
  2. Allocated – This is where you are buying names coins and bars, but the specific coins are not identified until shipped to you.
  3. Segregated – This is much like storing your items in a bank deposit box. They are your specific item. 

You can also invest in numismatic coins, which is where you buy coins based on their scarcity. So instead of buying metals based on its gold or silver content, you’re buying it because it’s of a rare year or it’s high quality. But it’s important to note that this is different than buying it just as a gold and silver investment. 

Invest in Gold and Silver Stocks, ETFs, and Mutual Funds

Another way to invest in gold and silver is to buy equities. You can buy stock in mining companies, like Newmont and Barrick. There are a lot of large/major and small/junior miners as well other companies involved in the gold and silver industry.

If you invest in a mining company and they have a million ounces of gold in the ground, as gold goes up in spot price, the mining shares can go up at a greater percentage than if you just bought physical gold. The share price is based on those millions of ounces that are now worth mining as compared to the gold coins you purchase that go up based on the small number of coins. The biggest expense with mining is energy costs. So, if energy costs stay at the same cost, your mining costs stay the same as the value of your metals goes up. 

There are two well-known ETFs representing physical metal. There’s GLD for gold and SLV for silver. While these are the most populer, I prefer PHYS for gold and PSLV silver. These are two closed-ended funds run by Sprott in Canada. 

There’s also ETFs based on the mining companies. GDX is the most popular for major miners. And then there’s GDXJ for the junior miners.  

And finally, there are mutual funds you can buy. THere are several focused exclusively on gold and silver stocks  from companies like Fidelity, Vanguard, Sprott, and others.  There are also commodity or natural resource company mutual funds. So, in addition to mining companies, they may own stock in agricultural, water, forestry, oil and gas, and other types of companies involved with natural resources. 

Invest in Perth Mint Certificates

The Perth Mint in Australia is the oldest mint in Australia. You can take part in their gold and silver certificate program. This is another way to invest in either unallocated or allocated metal that is stored at the Perth Mint until you want it shipped to you, or sold by the mint to deliver you the proceeds. 

Go Out and Find Gold and Silver Yourself

Many people go out and find gold themselves. One way to do this is to go panning for gold in rivers. Just like the prospectors from the 1840 and 50s, you can go out to hot spots in California, Nevada, or Arizona where you can still find gold. You can buy a metal detector and search local parks and properties where old buildings used to stand. But, metal detecting is not a realistic way to find a large amount of precious metals. It is more of a fun activity with a surprise piece of treasure found every once in a while. You can search through your loose change and find an old silver coin. And finally, you can go out and find scrap gold and silver in computer chips, cell phones, tube TVs, organs, industrial circuit boards, and countless other items

As you can see, there are all kinds of ways to invest in gold and silver.  If you are interested in learning more, I’m happy to share my knowledge with you and guide you to additional sources of information.

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