The high inflation caused by the excessive money printing of the Fed has sent gold prices to all time high with 28% rise for the past year, but do you know that silver was up 114% for the same period? Do you know why silver more than doubled its price in a year and went up more than gold? The reason is simple: There is actually less above ground silver inventory than gold. Silver is rarer than gold from the inventory perspective. And silver is extremely undervalued comparing to gold. The mining ratio of gold/silver is 1/10, but the gold/silver price ratio is currently at 30/1. If you value silver by mining ratio, silver still has room to triple its price to catch up with the gold price. However, if you value silver by the inventory availability, silver can go up 30 folds in price to catch up with the gold price. You can find more detailed information about severe silver shortage here: http://www.youtube.com/watch?v=-IiarVvZguY
To invest in silver, you need to have a long-term view, and be prepared to ride out the ups and downs because silver prices like many other commodity prices are very volatile. If you can hold on to the silver for the long-term, then silver investment can bring you huge profits for the coming years/decades. It will give you huge profits just like those who rode out the silver volatilities of the past year were able to more than double their money.
There are a few ways to invest in silver:
1. Buy silver future contracts: If you have a future trading account, you can buy silver futures. This is the most risky way to play silver due to the leverage. You can win or lose very big in very short period of time trading silver futures.
2. Buy Ultra Silver fund (Symbol: AGQ): AGQ is an aggressive way to invest in silver. AGQ is designed to move at twice the rates of the silver ups and downs. If silver is up 1% in price, AGQ is designed to go up 2%, vice versus. If you have the guts to play in a rough sea, but not to the point of trading silver future contracts, then AGQ is for you.
3. Buy silver miner stock (Symbol: SLW): This is the largest silver streaming company in the world. When silver price goes up, SLW profits go up too. The analysts are expecting SLW to triple its profits for the first quarter of 2011. Despite the stock price has doubled in the past year, it is actually still very undervalued.
4. Buy silver funds: SIVR, PSLV and SLV are all silver funds. They hold actual silver in vaults. So it is a very simply way for you to own silver indirectly.
5. Buy silver coins from the US Mint: However, due to the severe silver shortage, even the US Mint is experiencing difficulties in obtaining silver to make silver coins recently. You may have to keep checking the US Mint web site and buy it whenever it is available. I highly recommend you to invest in high concentration silver coins like American Eagles Silver coins: http://catalog.usmint.gov/webapp/wcs/stores/servlet/CategoryDisplay?langId=-1&storeId=10001&catalogId=10001&identifier=1000 However due to the severe silver shortage, the US Mint does not have them available at all times anymore. You need to buy them as soon as they are available. Last batch was sold out in 5 minutes. The alternative is to buy lower concentration silver coins: http://catalog.usmint.gov/webapp/wcs/stores/servlet/CategoryDisplay?langId=-1&storeId=10001&catalogId=10001&identifier=2000 Lower concentration silver coins have better availabilities, but they can be sold out from time to time too. Be a little bit careful, not all coins are silver coins. You want to only invest in silver coins, not just regular coins. I personally would recommend you to invest in high concentration American Eagle Silver coins only. And if you are new to silver coins, only buy silver coins from the US Mint, not other internet sellers. There are many fake silver coins on the market.