If you don't want to directly own physical silver, but you also want a lower risk method than futures, you can buy an exchange-traded fund (ETF) that owns physical silver. You'll have the potential reward for having silver if the price goes up, but you'll run fewer risks, such as theft. Investors can own silver indirectly by owning shares in a silver ETF that has physical silver or silver futures contracts. Structured as escrow trusts, the shares of physical silver ETFs are backed by physical silver stored in a vault and supervised by a custodian.
Physical silver ETFs try to track the spot price of silver as closely as possible, but they will underperform due to the fees of the funds that are used to pay for the storage and insurance of physical silver, the various administrative costs and profits of the sponsoring company. While silver can be volatile, the precious metal is also considered a safe asset, similar to gold, its sister metal. Safe assets can protect investors in times of uncertainty and, as tensions rise, they could be a good option for those seeking to preserve their wealth during difficult times. Physical ingots come in the form of silver ingots, silver coins and silver notes.
Experts recommend comparing premiums offered by several dealers and buying silver ingots in reputable markets such as SD Bullion and JM Bullion. However, there is also a strong second-hand market, where collectors connect to buy directly. When deciding what type of ingots to buy, you should consider their silver content, design, size and shape. It is also possible to have a precious metals IRA (although not all brokerage firms offer one), and to do so, investors must hire and pay for the services of a depositary and a custodian; under IRS regulations, ingots held in a precious metals IRA must be stored in an approved warehouse.