Are you someone who thinks that precious metals such as silver, gold, etc are only about jewelry? Do you know that you can actually make a killing in the stock market by trading in the best silver stocks? Surprised? Don’t be. Silver (Ag) and gold (Au) are known as commodities and by trading in these metals, especially silver, you will be able to earn three times as much money in the futures market than any other commodity.
If you prefer dealing in stocks and shares, you should invest in precious metal mining stocks and play safe. While silver stocks don’t give you the same leverage as the equivalent futures trading, they do endorse a more conservative and low-risk approach to investing and becoming rich as a result.
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What Will I Learn?
- Mining Stocks
- Here Are Some of The Top Traded Silver stocks in the US and Canada Stock Exchanges
- Mining Companies
- Top Silver Mining Companies
- How Does Buying Silver from a General Pool Work?
- How Can I Determine Which Method of Silver Purchase is Right For Me?
- Bottom Line
Silver is a precious metal that has been in demand for various purposes. While the cost of silver jewelry is less than that of gold jewelry, silver tends to move faster on the futures market as compared with gold futures. Silver and gold futures spell money for those individuals who have the ability to take risks and do not get scared of losing some money to market fluctuations. However, if you have a conservative approach toward investments and making money, silver stocks are good options.
Price Rise And Stock Price
Trading in silver futures means understanding the reasons for the change in the price of the metal. There are quite a few factors that affect the price of silver stocks and it’s not just the price of silver.
Typically, prices of silver stocks will fall, if the stock market is under pressure, irrespective of the fact that the price of the metal may be high. However, if the price of this metal stays high for a prolonged period of time, silver stocks will also move up.
Moreover, when investing in silver mining stocks, it’s best to pick stocks of silver companies that are large and well established as they offer a safer and more secure investment. Stay away from small companies and penny stocks as these are very speculative in nature and can lead you into trouble.
Since this metal has been used in industries as well as fashion, it experiences price rise as the economy does well, and therefore, allows you to hedge your investment from steep rise and fall.
Here Are Some of The Top Traded Silver stocks in the US and Canada Stock Exchanges
The following are the main traded silver stocks
(CDE) Coeur D Alene
Throughout North America, Coeur Mining company operates five mines. The company with a nearly US$1.4 billion market cap, silver production is represented by less than 26% of its overall revenue.
(TSX: FVI) Fortuna Silver Mines
This is a precious metals mining company from Canada operating in Argentina, Peru, and Mexico.
(HL) Hecla Mining
Hecla Mining is a pure-play silver stock if you are a long-term investor who is looking for a precious metals bull market exposure. the best way to leverage this precious metal is bull market owning shares for the strongest silver mining and exploration companies. in a bull market, The price of silver will tend to outperform the gold, and the silver stocks that are performing will dramatically outperform several physical metals.
Silver corp Metals (SVM)
Some big names in the industry include Wheaton Precious Metals Corp. ( WPM ), Hecla Mining Co. ( HL ), and SSR Mining Inc. ( SSRM ).
Below are the main mining companies
First Majestic Silver
The company gets almost half its revenue from silver and half from gold, making the Canada-based mining company one of the purest plays on silver in the mining sector. Even though it is a Canadian company, First Majestic silver puts a lot of focus on Mexico since it can produce more silver compared to any country worldwide.
First Majestic Silver Corp is a Canada-based silver and gold producer that is engaged in the exploration and development of mineral properties in the U.S. and Mexico
This is a silver-mining company that operates four mines such as the Santa Elena and San Dimas silver-gold mines, the Jerritt Canyon gold mine in Nevada, and the La Encantada silver mine in Mexico. In addition to these, the company also has silver exploration properties and a silver stream from the Springpole gold-silver project of 50 percent payable silver.
Demand, Supply, and Silver Price
Whenever there is a large imbalance between the demand and supply of silver, there is a corresponding rise and fall in the stock price of silver mining shares. Used in various industries like electronics, metal pipes manufacturing, coin minting, plastic industry, photography, laptops, refrigerators, etc, it is almost always in demand. Moreover, market experts feel that silver will outperform even gold in 2010, and therefore trading in silver futures or investing in silver stocks is a good way to make money and get rich.
Top Silver Mining Companies
Below is a list of the top silver mining companies based on their growth potential from silver production:
KUYA SILVER (CSE: KUYA)
Being a newly listed company mining silver, It earns interest at a rate of 100% in the Bethania silver mine that is located in central Peru. such a company will be executing a greater growth strategy through exploration
Pan American Silver Corp, (NASDAQ: PAAS)
Pan American Silver Corp is one of the Largest Silver Mining companies in the World; The company has Generated Significant Growth in the Recent Quarter. This is one of the largest silver mining companies in the world. The company is based in Canada and has mining operations in Mexico, Peru, and Bolivia.
The company has nine mines operating across north and south America.
Fortuna Silver Mines inc
The company has Canadian precious metals. The mining company operates in Peru, Argentina, and Mexico.
The company is operating five mines in North America. A market cap for this company is approximately US dollar 1.4 billion, but silver production is represented by less than 26% of its overall revenue.
There are important factors for the wise investor to take into consideration before investing in silver bullion. The following questions should serve as a general guideline when investing in silver and other precious metals.
How Does Buying Silver from a General Pool Work?
An investor will give a company who controls a large stock, or pool of silver a sum of money for a number of ounces of the white metal. The company then tracks the amount of silver that the individual purchased and deducts the number of ounces from the total ounces of the pool. The investor does not, and generally cannot, take delivery of the purchased silver.
The upside to this method of investing is that a large amount (i.e. thousands of ounces) does not need to be stored by the individual and is kept under constant security, possibly in an offshore location. The downside is the investor does not know if the company is selling more silver than it has and the investor does not physically possess his or her investment.
How Can I Determine Which Method of Silver Purchase is Right For Me?
First, determine the size of the forthcoming investment. If a limited quantity is desired (i.e. a few thousand ounces or less) then locate a secure means of storage – a safe deposit box will do fine.
If the quantity to be invested in is more than the secure storage will store, or secure storage cannot be found (a wise investor will shy away from buying an investment in the backyard), then buying silver from a general silver pool may be the best option. A wise investor may choose to diversify his or her investment by taking delivery and owning from a general pool.
There are several different forms of silver. What type is best to own?
Silver bullion can be found in either bars or rounds. Typically silver bullion bars come in 1 oz, 10 oz, 100 oz, and 1,000 oz weights. Usually, the 1,000 oz bars aren’t exactly 1,000 oz – these bars are individually weighed and their actual weight is then stamped on the top and side.
Generally, owning 1 oz round coins are more preferable to owning 1 oz bars because when trading silver for goods, rounds are more recognized as a coin and are easier to transport. Rounds will likely be sold in plastic tubes that hold a count of 20 and can be stored vertically or horizontally. 1 oz bars are frequently stored in plastic sheets that can be stacked on top of one another like sheets of paper.
The wise investor keeps in mind that 1,000 oz bars must be redeemed in their entirety, so when dealing with a few thousand ounces or less, a combination of 1, 10, and 100 oz bars is probably best. Only when storing a large amount of wealth should 1,000 oz bars be considered.
The top silver stocks as per market performance include EXK, HL, and MAG.
For those interested in investing in silver stocks, one of the most popular ETFs is the iShares Silver Trust. This is an (ETF) exchange-traded fund that focuses mainly on the physical silver. One of the reasons the fund is so popular is the fact that it invests in physical silver. So, by investing in the fund, your portfolio will gain access to silver itself, a known hedge against inflation.
How do you know that the round you are buying is 1 oz of pure silver?
Silver rounds are 1 oz and are referred to as 1 oz silver rounds. Silver rounds will have the purity and content stamped on the front of the coin. Look for “.999 fine silver” and “1 Troy ounce”. The weight will also be stamped in grams and will vary depending on the mint.
A smaller mint may appeal to investors by increasing the coin content from 31.1 grams to 31.2 grams or higher. Content and purity should be stamped on all silver that is sold which includes bars and rounds.
Should you purchase Generic, Semi-generic, Well-Known Minted, or Nationally Minted Rounds?
It never hurts to own a little bit of each, but generally speaking, the wise investor wants the most silver for the money. Generic bullion is the least expensive, but can also be the least recognizable when reselling to a private purchaser. Most coin dealers will purchase generic bullion without any questions being asked. A familiar semi-generic mint is A-mark, and two well-known mints are the Sunshine Mint and Northwest Territorial Mint.
Minted bullion coins Nationally (i.e. Canadian Silver Maple Leaf, American Silver Eagle, etc.) are very expensive to buy and cannot yield a higher rate of return on resale. Another type of silver an investor can purchase is pre-1965 U.S. coin bags.
These bags have a $1,000 face value and yield approximately 715 ounces of silver. Before circulation the same silver coins contained about 723 ounces but decreased due to wear and tear. It is up to each investor to assess individual needs and make silver purchases accordingly.
How Much Can You Expect To Pay for the Different Types of Bullion?
You should always be sure to call multiple dealers and suppliers (found online or in the yellow pages under Gold and Silver) to find the best price. Some wholesalers will only sell in bulk (i.e. 500 ounces) and will offer a discounted fee per ounce.
Large purchases can be made from a particular mint and spot price can be secured over the phone. When you are buying several to a few hundred 1 oz rounds, a dealer will typically charge $0.50 over spot per ounce of generic silver bullion. Some deals can be found and anything over $0.50 is probably too much.
When you are buying semi-generic, widely known, and nationally minted silver bullion, the dealer will charge you a higher fee as the recognition factor of the mint increases respectively. When you are deciding which is best to purchase, it is wise to consider future resale. It is always safe to own a little of each, but usually the type of mint pertains to private re-sale as most precious metals dealers will accept any minted silver without question.
Investing in stocks of silver mining companies is one of many methods in which you can gain indirect exposure to the price of silver. While silver investments can help you to diversify a given portfolio, you should note that silver miner stocks and silver price may significantly fluctuate within a short time.