Lock up the Tea Set: Silver’s Going Higher

The precious metals are suddenly hot again. I’ve talked about gold but said little about silver: usually the metal considered to be gold’s poorer cousin.

But make no mistake, as gold soars, so will silver. Silver has not only precious metal connotations but also industrial uses. It’s a two for one type play.

If you’re interested in some silver exposure in your portfolio, how do you invest in it? There are several good investment opportunities now in silver.

You can buy silver mining companies directly.

There are a number of several larger silver companies where you can invest in the stock, including:

Pan-American Silver (ticker: PAAS)
Silver Wheaton (ticker: SLW)
Hecla Mining (ticker: HL)
Coeur D’Alene (ticker: CDE)

You should research any of these companies thoroughly. As is true of any metal company, some are better managed than others. Some will see big gains when the price of silver goes up and others will not. Ask yourself: Are they making a profit? Are they getting their permits? Are they able to get the silver out of the ground despite high energy costs? These are all things to consider.

Investors can also buy Metal ETFs.

There is the Silver ETF (ticker: SLV). The SLV is directly tied to the price of the metal itself and owns no mining company shares.

Another ETF to consider is the Gold Miners ETF (ticker: GDX). Strangely, the Gold Miner ETF has quite a few silver companies mixed in with it including Silver Standard Resources (2.62% of the portfolio), Pan American Silver (2.55% of the portfolio), Hecla Mining (1.17% of the portfolio), Apex Silver (1.15% of the portfolio) and Coeur D’Alene (1.06% of the portfolio.) While their percentage doesn’t come close to the big gold companies in the ETF, it’s still a way to get exposure to a half a dozen silver companies and get gold exposure, which seems like a great investment combination.

There are also quite a few precious metal mutual funds you can choose from.

Vanguard has several that are, apparently, highly regarded. You’ll have to do your homework on the mutual funds- as you would with any investment. Watch out for crazy fees as well.

With the advent of the ETFs and simple investing in individual stocks, it’s now easy to do silver investing on your own (without a mutual fund.) But I can see the lure of buying into a mutual fund in this area (for those with no knowledge of mining companies and how they operate.) Best to leave it up to the professionals then.

Silver has finally traded above $15 an ounce. Investors have been waiting over 28 years to see that happen. Will it hold it? It seems likely that it will (for now.)

Silver’s day in the spotlight may now be approaching. Eventually, we may see Grandma’s antique tea set being hocked at the corner pawn shop. It’s not happening…yet. But eventually.