Silver Bullion

Silver has been used as a currency and method of investment for thousands of years. Its value is tied to that of gold, and for most of the nineteenth century, world governments held the price ratio between gold and silver at 15.5. In the twentieth century, the ratio between the two has been much more volatile. The average ratio in the twentieth century was 47.0 with a peak in 1990 of 101.63.

Investing 

Despite these fluctuations, and perhaps because of them, silver is considered an excellent means of investment. There are many ways to invest using silver, such as in silver coins, but an increasingly common method is with the purchase and storage of silver bullion bars.

Silver bullion bars come in a variety of sizes. They can be purchased from certain financial establishments and in banks in Switzerland and assorted other countries, bullion bars can be purchased at a bank counter. The bars are then stored in a home vault, safety deposit box or storage with a bank or dealer.

Bullion 

The most popular silver bullion bars for investment are 100 oz bars. Each 100 oz bar weighs in at 6.8 pounds or 3.11 kilograms. The two most popular brands of silver bullion are Engelhard and Johnson Matthey. These two brands sell at a premium price, but the spot price of silver fluctuates so greatly, even the price of premium bars can change dramatically in a matter of weeks or months.

The manufacturer of the silver bullion can make an impact the value of the silver itself. Odd weight retail bars of silver often sell for less than even standard bars due to the different weights and the obscurity of the manufacturer. Silver bullion bars are also found in other commercial sizes, but the 100 oz bar is most common among retailers.

The silver found in bullion is not the same as the sterling silver found in flatware and silver jewelry. Bullion silver is at least 99% pure which makes it more malleable and expensive. The average spot price of silver in 2006 was $12.62 per ounce. Gold was $628.20 per ounce. The price of both has risen steadily, despite daily fluctuations, since 1990.

The Benefits 

Many investing experts and firms, for that matter, have a significant portion of their portfolios in precious metals such as silver. While it should not be your entire portfolio, owning precious metals is a hedge against uncertainty in other areas of the market.

Gold and silver have been a standard of wealth and had value for thousands of years. If banks collapsed tomorrow and paper money became worthless, silver would still have significant purchasing power. This is the reason many investors purchase bullion. They have it as a means to balance out riskier investments in their portfolio, but also to have a form of money should a major disaster occur.