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The Advantages of a Silver ETF

Added: Thursday, July 28th 2011 at 12:04pm by emersonzz1985
 
 
 
They say that when you're planning to invest on something, silver ETFs are the best idea. It would be the best approach to first of all understand what is silver ETF. Before explaining what silver ETFs are, I'll explain first what does ETF means. The acronym ETF stands for exchange traded funds and this makes it trade like the stocks exchange although in the real sense it is a security tracking of a commodity, index or an asset for example the index fund.



Investment in assets that are silver is what is called Silver ETF. In this sort of investment, there is a custodian that will keep the materials that are made of silver while the price in the open is kept track of. One of the reasons that makes the Silver ETF when going for the ETF investment is that it is actually protected against inflation. Considering the risks that come with the weakening of currencies and cases of inflation, investing in the Silver ETF is the option that is actually available.
When you become an owner of the Silver ETF shares, this does not actually mean that you own actual silver. To actually show that you own some part of the silver once you buy the Silver ETF shares, there is piece of paper as proof. A share of the silver ETFs shows that one owns one ounce of silver. When investing on these silver ETFs, you must be careful when trading these silver ETFs. To make sure that you are always on top matters that concern your investment, one should make sure that they constantly follow the price of their silver ETFs shares in comparison with the market price for silver. Most people may think that the price of silver ETFs is based on the market value of silver. However this is not true because there are times that when the price of the commodity increases but the price of silver ETFs decreases, instead of the other way. Gold and silver ETF is different from other ETFs because when other metal ETFs were adding their ounces, there are no changes at all in gold andsilver ETFs. However, supply and demand of the market of silver is also different from that of gold’s. This actually accounts for the fact that the price of silver shifts quite a lot in comparison to that of gold.
When it comes to the silver ETFs, there are actually two types which include the ETFS Phys Silver Shares (SIVR) and iShares Silver Trust (SLV) which actually belongs to the Barclays Global Investor International Inc., which is actually the first company that developed the whole silver ETFs investment. When planning to invest on silver ETF, iShares Silver Trust ETF is usually recommended for the investors because the other one which is ETFS Phys Silver Shares was newer compared to the other.
If you’re wondering how to invest and trade with silver ETF, this is what you’ll do. First you have to open an online stocks broker’s account if you still don’t have one. In order to make sure that the costs are kept to a minimum, the stocks should be traded online. After getting your account, purchasing of the silver ETF can now commence. The options that are available for the people are trading in the silver ETF are Silver Trust (SIVR) and the iShares Silver Trust ETF (SLV) which is actually the one that is mainly used. Then you’ll have to enter the volume of shares that you would like to purchase, remember that you have to leave an amount as a maintaining balance for your account.



Not all the money in your account can be used to buy shares but this will depend on the online stock trading company and also the amount that is to remain in the account will once again depend on the company that one is using. After purchasing of the shares, you have to immediately track the change of prices so that you’ll know when to sell it. This is actually because there are times that the price will actually rise and drop suddenly since it is expected in trading.


Additional Resources:
ETF Silver Information
Why You Should Buy a Silver ETF

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