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Investing in Silver Mining Stocks

By Jonas Dorian
Published: June 29, 2007 in Silver Investing Articles,

There are many reasons to own silver. One reason is that owning silver and its big brother -gold-is a safe way to protect wealth against the ravages of irresponsible governmental fiscal and monetary policies. Another very good reason is the basic situation of supply and demand.

In 2006, about 42% of silver supply was consumed by industrial use, about 28% consumed by jewelry, 20% consumed by photography, 5% consumed in coins and medallions, and that’s 95% of total silver supply!

This implies either a “surplus”, or “investment demand”, of only about 5% of the total.  Investment demand remains small, but is growing. New demand from hedge funds and commodity funds are adding fuel to the fire.

Basic economics dictates that increasing demand and a shrinking supply brings about higher prices. Moreover, the Chinese government, a major player in creating the rush on commodities of all types, announced that it had depleted its stocks of silver.

So, there are strong arguments for the ownership and appreciation of silver. But what are the ways an investor can take advantage of these fundamentals?
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Jonas Dorian is the Senior Editor for Silver Monthly. (1)

Personally Storing Silver Coins and Bullion

By Jonas Dorian
Published: June 28, 2007 in Silver Investing Articles,

If you plan to store silver coins, bullion or other precious metal, you’re probably a collector (numismatist), a survivalist or a precious metals investor.

The differences between a collector, a survivalists or an investor is that the collector is more focused on the intrinsic value and condition of each individual item.

As a result, for the collector, maintaining the best appearance and condition of each coin or piece is critical in determining market value. Nicks, scratches, tarnishing, bag marks and other blemishing can alter value as much as 20%-40%.

On the other hand, the survivalist and investor are mainly interested in the underlying value of the silver or gold content of the coins but, for a number of reasons, prefer holding their investment in physical form.

While it’s obvious the collector needs to be more concerned with storage and handling, the survivalist and investor should also be aware of the physical risks to storing coins, ingots and plates.

Where to store your coins or precious metals? Even though there is a whole industry devoted to storing precious metals, for the purposes of this article, we will consider the two most common storage facilities for the ordinary collector/hoarder: the home and bank safety deposit box.
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Jonas Dorian is the Senior Editor for Silver Monthly. « Previous