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<ul class="summary-list"><li><keyword id="35264" type="COMPANY" weightage="60" keywordseo="silver">Silver</keyword> miners First Majestic Silver, Pan American Silver, <keyword id="4876952" type="PERSON" weightage="60" keywordseo="wheaton-precious-metals">Wheaton Precious Metals</keyword>, and more are all rising on Monday.</li><li>The Silver spot price jumped 11% Monday morning before paring gains. </li><li><keyword id="119992" type="ORGANIZATION" weightage="60" keywordseo="precious-metals">Precious metals</keyword> broker <keyword id="10689300" type="UNKNOWN" weightage="60" keywordseo="apmex">APMEX</keyword> said it received 12 times the normal demand for silver last weekend.</li></ul>Shares of silver miners climbed on Monday as the spot <a href="https://markets.businessinsider.com/commodities/silver-price?utm_source=markets&amp;utm_medium=ingestgest">silver price</a> jumped 11% to an eight-year high before paring gains.Silver has seen a sharp rise in prices as Reddit traders on the <a href="https://www.businessinsider.com/wallstreetbets-fastest-growing-subreddit-hits-58-million-users-2021-1?utm_source=markets&amp;utm_medium=ingestgest">WallStreetBets</a> forum pile into the precious metal.After being restricted from trading certain popular stocks by brokerages, some members of the forum have turned to silver as their <a href="https://markets.businessinsider.com/news/stocks/reddit-day-traders-wallstreetbets-gamestop-gme-rally-upending-stock-market-2021-1-1030009280">next potential short-squeeze</a>. The sudden interest in the metal caused prices to skyrocket, and as silver goes, so do its miners.Shares of First Majestic Silver, Pan American Silver, and Wheaton Precious metals are up 23%, 16%, and 6%, respectively, as of 10:21 AM EST. BlackRock's <a href="https://markets.businessinsider.com/etfs/ishares-silver-trust-us46428q1094?utm_source=markets&amp;utm_medium=ingestgest">iShares Silver Trust</a> was also up 9.48% in pre-market trading before retracing some gains.Read More: <a href="https://www.businessinsider.com/option-investing-strategies-downside-protection-ubs-reddit-stock-frenzy-2021-1?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener noreferrer">As Redditors flood the stock market, UBS breaks down 6 options strategies investors can use right now to protect their portfolios</a>.The news of silver jumping had some members of the WallStreetBets forum celebrating, while others said the move was benefitting too many institutional names.In particular, the forum isn't too pleased with Kenneth Griffin's Citadel after the firm injected cash into Melvin Capital, a hedge fund that <a href="https://markets.businessinsider.com/news/stocks/melvin-capital-lost-53-percent-january-after-gamestop-shares-skyrocketed-2021-1-1030023191">lost about 53%</a> of its value after a short-squeeze on shares of GameStop hurt results."CITADEL IS THE 5TH LARGEST OWNER OF SLV. IT'S IMPERATIVE WE DO NOT 'SQUEEZE' IT." one WallStreetBets <a href="https://www.reddit.com/r/wallstreetbets/comments/l9gv98/citadel_is_the_5th_largest_owner_of_slv_its/?utm_source=share&amp;utm_medium=ios_app&amp;utm_name=iossmfe=iossmf">user</a> wrote on Sunday.Citadel Advisors LLC owned about 6 million shares of the <a href="https://www.bloomberg.com/quote/SLV:US">iShares Silver Trust</a> as of Sept. 30, equivalent to a 0.93% stake, <a href="https://www.bloomberg.com/news/articles/2021-02-01/citadel-s-silver-bet-exposes-rifts-in-the-wallstreetbets-army">per Bloomberg</a>.Even if Reddit does target silver, it's not clear the online community can have the same effect on precious metals as it did with individual stocks."It's a very different target, but the fact that you can move silver, such a large market, is an indication to everybody that they have to take these new technicals seriously," said <keyword id="192956" type="PERSON" weightage="60" keywordseo="Mohamed-El-Erian">Mohamed El-Erian</keyword>, Allianz chief economic advisor on CNBC's "<a href="https://www.cnbc.com/squawk-box-us/">Squawk Box</a>."Read More: <a href="https://www.businessinsider.com/stock-market-short-squeeze-reddit-day-trading-advice-ally-invest-2021-1?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener noreferrer">A chief investment strategist breaks down how the GameStop saga could upend long-standing practices on Wall Street - and shares her 4-part advice for navigating the frenzied trading environment</a>.The recent Reddit push isn't the only bullish news for miners, however. Dennis Karp, CEO of silver miner Manuka Resources, said he sees solid fundamentals, EV use cases, and rising inflation expectations helping silver move higher."Investor demand last year was three times the value of previous years, and the last five years of mined silver production have all been lower than the previous years," Karp said. "Its use in EVs is substantial, and in photovoltaics, 20 grams of silver goes into each solar panel."It's unclear whether Reddit traders can drive a sustained rally in silver prices, but for now, they are clearly moving demand. Precious metals broker APMEX said demand for silver was 12 times higher than normal over the weekend.The demand increase has led silver miners on historic runs over the past five days. Shares of the Vancouver-based First Majestic jumped over 60% during the period, while shares of Pan American Silver are up 34% and shares of Wheaton Precious Metals are up over 16%.

Silver miners soar as Reddit traders pile into the precious metal

<ul class="summary-list"><li><keyword id="35264" type="COMPANY" weightage="60" keywordseo="silver">Silver</keyword> slid 7% from Monday's 8-year high, as the effort to jack up the price faltered.</li><li>Analysts said day traders faced an uphill struggle to maintain price rises in such a deep market.</li><li><keyword id="363661" type="COMPANY" weightage="60" keywordseo="GameStop">GameStop</keyword> and <keyword id="6358378" type="ORGANIZATION" weightage="60" keywordseo="amc">AMC</keyword> shares also fell, as the Reddit-driven retail frenzy lost steam.</li></ul>The <keyword id="432846" type="PERSON" weightage="60" keywordseo="silver-price">silver price</keyword> tumbled 7% from an 8-year high on Tuesday, as efforts by retail traders to jack up the price fizzled out, and other day-trader targets such as GameStop slumped.On Monday, <a href="https://markets.businessinsider.com/commodities/silver-price">silver</a> rose as much as 13% to above $30 an ounce, <a href="https://markets.businessinsider.com/news/stocks/silver-price-reddit-day-traders-target-wall-street-2021-2-1030026658">as amateur investors piled into the market</a>, causing exchange-traded funds to surge and some online retailers to restrict transactions.The rally in silver appeared to be a continuation of the <a href="https://www.businessinsider.com/reddit-day-traders-wallstreetbets-gamestop-gme-rally-upending-stock-market-2021-1">day-trading frenzy</a> that drove <a href="https://markets.businessinsider.com/stocks/gme-stock">GameStop shares</a> 400% higher last week, with the hashtag #silversqueeze trending on Twitter.Yet the rally lost impetus on Tuesday morning, with the benchmark silver futures price sliding 7.2% to $27.30 an ounce as of 9.45am ET.Read More: <a href="https://www.businessinsider.com/stock-picks-to-buy-24-highest-conviction-buy-rated-stocks-2021-1" target="_blank" rel="noopener noreferrer">Jefferies says to buy these 24 stocks that represent its analysts' highest-conviction picks for 2021</a>CME Group, which runs the Chicago Mercantile Exchange, increased the margins investors need to post to trade silver futures by 17.9% on Monday, which analysts said tamped down activity.BlackRock's <a href="https://markets.businessinsider.com/etfs/ishares-silver-trust-us46428q1094">iShares Silver Trust</a> exchange-traded fund fell sharply, opening sharply lower on Tuesday at around $25.28 after closing on Monday at $26.76.Analysts said the rapid turn-around in the price of silver showed the difficulty retail traders face in trying to drive up the price.Part of the energy behind the silver rally on Monday was that day traders on <keyword id="334157" type="COMPANY" weightage="60" keywordseo="Reddit">Reddit</keyword> and elsewhere had encouraged each other to buy up the metal in the belief that major financial institutions are betting against it.Many members of the Wall Street Bets forum criticised the idea of targeting silver, however, saying the focus should remain on GameStop. Some noted that major Wall Street banks, and the hedge fund Citadel Advisors, were the biggest holders of the iShares Silver ETF.Read More: <a href="https://www.businessinsider.com/stocks-to-buy-silver-short-squeeze-stock-picks-rbc-2021-2" target="_blank" rel="noopener noreferrer">Buy these 4 stocks poised benefit from a spike in silver prices, says RBC Capital Markets - including 2 set to soar 73%</a>Bank of America strategist Michael Widmer said in a note there were signs that silver purchases "in recent days have come from both the retail and institutional space."Adrian Ash, director of research at precious-metals platform BullionVault, told Insider that the sheer size of the silver market was a major problem for day traders thinking of targeting the metal."While silver is much more volatile than gold - with wholesale volumes only one-seventh the value - [it's] still massively larger than GameStop at $8 billion per day," Ash said.GameStop shares slid 42% at the opening bell on Tuesday morning to around $125.00 as the retail frenzy appeared to peter out. Movie theater chain <a href="https://markets.businessinsider.com/stocks/amc-stock">AMC</a> was down around 40% to around $8.

Silver tumbles 7% from 8-year high as day-trader rally runs out of steam - GameStop and other hot stocks are also sliding

<ul class="summary-list"><li><keyword id="35264" type="COMPANY" weightage="60" keywordseo="silver">Silver</keyword> has become a new target for Reddit day traders after multiple posts on the infamous <keyword id="9346197" type="UNKNOWN" weightage="60" keywordseo="wallstreetbets">WallStreetBets</keyword>.</li><li>One post on the now-famous subreddit called the silver market "one of the most manipulated on Earth."</li><li>The <keyword id="210591" type="COMPANY" weightage="60" keywordseo="iShares-Silver-Trust">iShares Silver Trust</keyword> ETF was up as much as 7.2% on Thursday.</li></ul>Reddit day traders are turning to silver for their next short-squeeze target after being restricted from hot stocks like GameStop and AMC on some <a href="https://markets.businessinsider.com/news/stocks/robinhood-removes-gamestop-amc-reddit-wallstreetbets-fueled-stock-rally-gme-2021-1-1030015292">trading platforms.</a><a href="https://www.reddit.com/r/wallstreetbets/">Reddit's WallStreetBets</a> has been the talk of the market over the past few weeks as the forum used retail traders' purchasing power to put the squeeze on institutional investors and short-sellers.Now it appears the day traders of Reddit have found their next target in <keyword id="119992" type="ORGANIZATION" weightage="60" keywordseo="precious-metals">precious metals</keyword>."Silver Bullion Market is one of the most manipulated on earth. Any short squeeze in silver paper shorts would be EPIC," <a href="https://www.reddit.com/r/wallstreetbets/comments/l68ill/the_biggest_short_squeeze_in_the_world_slv_silver/"> a user on Reddit's WallStreetBets posted</a>. "We know billion banks are manipulating gold and silver to cover real inflation. Both the industrial case and monetary case, debt printing has never been more favorable for the No. 1 inflation hedge Silver."Read More:<a href="https://www.businessinsider.com/stock-market-investing-strategy-updated-shiller-pe-ratio-leuthold-group-2021-1?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener"> A Wall Street firm tweaked the Shiller PE ratio to create a superior gauge of the strongest stock-market returns - and broke down why the beloved metric won't cut it anymore</a>Another post on the site said, "inflation-adjusted Silver should be at 1000$ instead of 25$. Why not squeeze $SLV to real physical price. Think about the Gainz. If you don't care about the gains, think about the banks like JP MORGAN you'd be destroying along the way."The iShares Silver Trust gained as much as 7.2% on Thursday morning after the posts, a significant move for an ETF that normally has low volatility.Spot silver also gained 6.8% before paring gains, while individual names in the industry like First Majestic Silver were probably the biggest beneficiaries of the move.Shares in First Majestic soared as much as 39% before paring gains. Still, First Majestic is up over 20% as of 2:35 PM EST."There's a short squeeze going on in silver. The 'hoodies' are all rolling into silver, and the party is on," Phil Streible, chief market strategist at Blue Line Futures, <a href="https://www.bloomberg.com/news/articles/2021-01-28/silver-is-the-latest-market-hit-by-reddit-day-trader-frenzy">told Bloomberg</a>. "All those other stocks like GameStop and AMC, they're dumping because they've been restricted, and they gotta go into other short opportunities, and silver is an easily identifiable target."Read More:<a href="https://www.businessinsider.com/cathie-wood-ark-invest-analysts-top-10-stock-picks-q4-2021-1?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener"> 'We're very surprised we didn't underperform in the 4th quarter': Cathie Wood and her analysts break down their stock-selection process and the top 10 picks that contributed to the outperformance of ARK ETFs in Q4 2020</a>Silver prices have been muted for months after falling from highs of $28.30 an ounce last August.The precious metal is generally not a volatile commodity, making Thursday's spike in price notable. Spot silver has traded between $14 and $28 for the past five years.Precious metal bulls are taking note of the price action. Peter Schiff, CEO of Euro Pacific Capital, <a href="https://twitter.com/PeterSchiff/status/1354795525086859266">said on Twitter</a>, "It looks like the #reddit raiders have turned their attention to #silver stocks. They're getting smarter. Silver stocks are actually cheap, and represent good investment value. The fact that some investors were foolish enough to short these stocks makes their trade even better."

Reddit day traders look to silver as the next short-squeeze after being restricted from hot stocks

<ul class="summary-list"><li><keyword id="35264" type="COMPANY" weightage="60" keywordseo="silver">Silver</keyword> jumped as much as 13% on Monday as amateur investors piled in, before slipping back slightly.</li><li>The so-called silver squeeze follows the Reddit-driven surge in <keyword id="363661" type="COMPANY" weightage="60" keywordseo="GameStop">GameStop</keyword> shares last week.</li><li>But the rally sparked controversy on <keyword id="334157" type="COMPANY" weightage="60" keywordseo="Reddit">Reddit</keyword>, with users saying GameStop should remain the target.</li></ul>The <a href="https://markets.businessinsider.com/commodities/silver-price">price of silver</a> on Monday jumped as much as 13%, to $30.35 per ounce, hitting an 8-year high. The surge pushed up shares of silver-mining companies and causing retail sites to limit trading amid the latest attempt of amateur investors to squeeze Wall Street.Silver pared gains to trade 8% higher, at $29.01 per ounce, as of 11:45 a.m. ET in New York.But the so-called silver squeeze proved controversial on the Reddit forum<a href="https://www.businessinsider.com/wallstreetbets-fastest-growing-subreddit-hits-58-million-users-2021-1"> Wall Street Bets.</a> Many users argued that the army of day traders should keep targeting<a href="https://markets.businessinsider.com/stocks/gme-stock"> GameStop shares</a> and not shift their sights elsewhere.Last week, traders organizing themselves on Reddit<a href="https://www.businessinsider.com/how-wall-street-bets-subreddit-chose-gamestop-stock-2021-1"> realized their power</a> when they bid up GameStop shares by around 400%. The surge hit hedge funds and others who had been betting the price would fall, costing them more than<a href="https://www.businessinsider.com/short-sellers-sitting-on-19-billion-of-losses-on-gamestop-data-shows-2021-1"> $19 billion.</a>On Monday morning, the pivot towards other targets picked up speed, with the hashtag #silversqueeze trending on Twitter. Online financial personalities were cheering on day traders, with bitcoin investor<a href="https://twitter.com/cameron/status/1355927997916839946?s=20"> Cameron Winklevoss tweeting</a>: "If Silver market is proven to be fraudulent, you better believe Gold market will be next."The <keyword id="432846" type="PERSON" weightage="60" keywordseo="silver-price">silver price</keyword> has risen around 16% over the last five days as Wall Street Bets members have encouraged each other to buy up the metal in the belief that major financial institutions are betting against it.Read more:<a href="https://www.businessinsider.com/stocks-to-buy-silver-short-squeeze-stock-picks-rbc-2021-2"> Buy these 4 stocks poised benefit from a spike in silver prices, says RBC Capital Markets - including two set to soar 73%</a>However, the latest<a href="https://www.cftc.gov/dea/futures/deacmxsf.htm"> data from the US regulator</a> showed money managers are on balance betting the price will rise.BlackRock's<a href="https://markets.businessinsider.com/etfs/ishares-silver-trust-us46428q1094"> iShares Silver Trust</a> surged as much as 12% on Monday as retail investors piled into exchange-traded funds, which give them access to silver. iShares Silver, the world's biggest silver ETF, saw inflows of close to $1 billion on Friday.Shares in companies in the industry jumped. Pan American Silver Corporation's shares rose 12.3% while miner Fresnillo's London shares climbed 9.8%.Silver retail sites were left struggling to keep up with the demand. Money Metals said it would be limiting silver orders due to "extreme demand". APMEX said it was expecting processing delays of up to three days.The move into silver was controversial on the Reddit forum Wall Street Bets, which has <a href="https://markets.businessinsider.com/news/stocks/reddit-day-traders-wallstreetbets-gamestop-gme-rally-upending-stock-market-2021-1-1030009280">driven the GameStop frenzy.</a> Some users noted that huge investment banks, and the hedge fund Citadel Advisors, were the biggest holders of the iShares Silver ETF.Read more:<a href="https://www.businessinsider.com/stock-picks-to-buy-heavily-shorted-companies-overweights-wells-fargo-2021-1"> Buy these 26 heavily shorted stocks as retail traders trigger wild rallies in Wall Street's least-liked names, Wells Fargo says</a>"By buying silver/going long on silver, you would be directly putting money into the pockets of the EXACT HEDGE FUNDS ON THE OTHER SIDE OF $GME," one user posted. Others said the Reddit army should focus their efforts on driving up the <a href="https://markets.businessinsider.com/stocks/gme-stock">GameStop share price</a>, which was down around 25% by mid-morning.Adrian Ash, director of research at precious-metals platform BullionVault, told Insider: "The sudden inflow of money driving this spike will also need to be sustained and repeated if silver is going to run higher."The basis for Reddit's 'silver squeeze' is flimsy at best. Speculative short-selling in silver has been very tame in New Year 2021, and the commercial side of the industry will only grow its price-hedging the higher it goes. So there just isn't the structural opportunity which a heavily shorted small company might offer."

Silver spikes 13% to 8-year high as Reddit day traders turn their buying power towards a fresh target

<ul><li><keyword id="7234129" type="UNKNOWN" weightage="60" keywordseo="justin-sun">Justin Sun</keyword> invested $12 million in <keyword id="363661" type="COMPANY" weightage="60" keywordseo="GameStop">GameStop</keyword>, <keyword id="6358378" type="ORGANIZATION" weightage="60" keywordseo="amc">AMC</keyword>, and <keyword id="35264" type="COMPANY" weightage="60" keywordseo="silver">silver</keyword> during the meme-stock boom.</li><li>The Tron chief's $10 million bet on GameStop has slumped to about $2 million.</li><li>Sun advised <keyword id="6358963" type="DEFINITION" weightage="60" keywordseo="Warren-Buffett">Warren Buffett</keyword> to invest in Tesla and bitcoin during their charity lunch.</li><li><a href="https://www.businessinsider.com/">Visit Business Insider's homepage for more stories</a>.</li></ul>The <keyword id="6357017" type="DEFINITION" weightage="60" keywordseo="cryptocurrency">cryptocurrency</keyword> entrepreneur Justin Sun is down about $8 million on his <a href="https://markets.businessinsider.com/stocks/gme-stock">GameStop</a> bet, <a href="https://www.bloomberg.com/news/videos/2021-02-11/tron-founder-justin-sun-bets-on-meme-investing-video">he told Bloomberg TV this week</a>.The <a href="https://markets.businessinsider.com/currencies/news/justin-sun-tron-bittorent-crypto-ceo-postponed-warren-buffett-lunch-2019-7-1028381676">Tron and BitTorrent boss</a> - a protégé of the Alibaba founder Jack Ma - plowed $10 million into GameStop and $1 million into each of <a href="https://markets.businessinsider.com/stocks/amc-stock">AMC</a> and <a href="https://markets.businessinsider.com/etfs/ishares-silver-trust-us46428q1094">iShares Silver Trust</a> during the meme-stock frenzy. All three securities have retreated in recent days.However, Sun said he didn't plan to sell his GameStop stake, as he believes the <a href="https://markets.businessinsider.com/news/stocks/reddit-day-traders-wallstreetbets-gamestop-gme-rally-upending-stock-market-2021-1-1030009280">Wall Street Bets movement</a> marks a "paradigm shift" in investing. The internet community is seizing some of the power to price assets from big banks and hedge funds, he said.Read more: <a href="https://www.businessinsider.com/stocks-to-buy-online-retail-pandemic-picks-structural-winners-bofa-2021-2" target="_blank" rel="noopener noreferrer">BANK OF AMERICA: Buy these 7 online-retail stocks that are 'structural winners' set to build on strong 2020 gains - including one with 41% upside</a>Sun pointed to Tesla CEO Elon Musk as an example of an executive embracing the new status quo. Musk is "representative of this meme culture and representative of this new-generation movement," he said.Sun added that he planned to hire celebrities and artists to boost the appeal of his company's cryptocurrency, <a href="https://markets.businessinsider.com/currencies/trx-usd">Tron</a>, to this new breed of investors. "The meme is very important in the cryptocurrency world," he said.The Tron boss is best known for <a href="https://markets.businessinsider.com/currencies/news/tron-ceo-justin-sun-had-5-million-lunch-warren-buffett-2020-2-1028882022">paying $4.6 million to dine with Warren Buffett</a> in January 2020. He told Bloomberg TV that during their meal he advised Buffett to invest in <a href="https://markets.businessinsider.com/stocks/tsla-stock">Tesla</a> and <a href="https://markets.businessinsider.com/currencies/btc-usd">bitcoin</a>.Read more: <a href="https://www.businessinsider.com/stock-market-outlook-blackrock-investing-advice-covid-pandemic-shifts-sectors-2021-2" target="_blank" rel="noopener noreferrer">BlackRock says investors haven't fully priced in the structural changes brought about by the pandemic - and pinpoints 2 areas of the market that can still run for years</a>If the famed investor and <keyword id="6362665" type="ORGANIZATION" weightage="60" keywordseo="berkshire-hathaway">Berkshire Hathaway</keyword> CEO had followed the recommendation that day, he would be sitting on a 600% gain on Tesla and a 450% gain on bitcoin.However, Buffett has <a href="https://markets.businessinsider.com/news/stocks/elon-musk-warren-buffett-kindly-grandfather-public-image-not-real-2020-7-1029432936">clashed with Musk</a> and <a href="https://markets.businessinsider.com/currencies/news/warren-buffett-best-quotes-bitcoin-cryptocurrencies-investing-rat-poison-squared-2021-1-1029974898">blasted bitcoin</a> as a worthless delusion and "rat poison squared," making it unlikely that he would follow Sun's advice anytime soon.Sun has also compared one of Buffett's most iconic investments to those captivating the newest cohort of investors."Coca-Cola has become Bitcoin, Tesla, Wall Street Bets for the younger generation," <a href="https://twitter.com/onlyyoontv/status/1357686334685544448">he told CNBC last week</a>.

Crypto boss Justin Sun is down $8 million on his GameStop bet - and reveals he told Warren Buffett to invest in Tesla and bitcoin

<ul class="summary-list"><li>You can buy <keyword id="35264" type="COMPANY" weightage="60" keywordseo="silver">silver</keyword> in two basic ways: physical bullion (bars, coins) or silver-backed securities (stocks, funds, <keyword id="10018057" type="UNKNOWN" weightage="60" keywordseo="etns">ETNs</keyword>).</li><li>While bullion is a "purer," more direct way to own silver, securities are easier to hold and can appreciate.</li><li>Silver offers a long-term hedge against inflation and stocks, but also benefits from certain industries' growth.</li></ul>Savvy investors often step outside the comfort zone of conventional paper investments - stocks, bonds, and funds - and into more exotic, hard assets. Silver is one such. Like other <a href="https://www.businessinsider.com/what-are-alternative-investments" target="_blank" rel="noopener">alternative investments</a>, it often performs in an opposite way to traditional securities: its price rising when theirs falls, and vice versa. So it can be an invaluable way to <a href="https://www.businessinsider.com/what-is-diversification" target="_blank" rel="noopener">diversify</a> a portfolio.Silver is more than a stock market hedge, though. As a physical commodity, it has an intrinsic value, which means it's immune to inflation - the rise in prices that erodes the value of paper, government-issued currencies. Given its inherent worth, some investors also see it as a safe haven against political and economic turmoil, similar to its more glamorous cousin, <a href="https://www.businessinsider.com/how-to-buy-gold" target="_blank" rel="noopener">gold</a>. But silver is much more affordable than its yellow-metal cousin. Also, unlike <keyword id="18712" type="ENTERTAINMENT" weightage="60" keywordseo="Gold">gold</keyword>, silver is valued for its widespread <a href="https://markets.businessinsider.com/news/stocks/metal-commodity-price-outlook-silver-platinum-outperform-gold-ubs-precious-2021-1-1029961646" target="_blank" rel="noopener">industrial uses</a> - including innovative, high-growth tech industries like solar energy and electric autos. All these factors have precious metal experts like <a href="https://www.linkedin.com/in/giancarlo-camerana-958517a/?originalSubdomain=ch" target="_blank" rel="noopener">Giancarlo Camerana</a>, a strategic advisor at <a href="https://qore.gold/" target="_blank" rel="noopener">QORE Switzerland</a> feeling optimistic about the performance of silver in the coming decade. What it comes down to, he says, is "a combination of bullish factors: increased demand from both the industrial sector and financial investors as they worry of the ongoing currency debasement and the possible dollar devaluation."How do you invest in silver, anyway? Here's what interested investors should know.<h2>How to invest in silver</h2>There are a variety of ways to invest in silver. But for individual investors, the buying options boil down to two basic forms:<ul><li>Physical silver, or bullion (the most direct and obvious way to invest) </li><li>Silver securities, such as stocks, funds, and exchange-traded notes (less of a pure play, but more convenient)</li></ul><h2>Physical silver</h2>The physical metal is known as bullion. Investment-grade bullion typically refers to silver that's 99.9% pure. It comes in the following forms:<ul><li>Bars - Bars consist of solid silver weighed by the troy ounce that's been poured or pressed into stamped blocks. They're available for purchase from reputable metals dealers like If you're starting here, aim for smaller ounce-counts, as they'll be easier to sell off if need be.</li><li>Coins and rounds - forget about rare or collectible coins here, which have numismatic value beyond their silver content. We're talking solely about specie issued by government mints for investment purposes only. Some of the most <a href="https://www.gainesvillecoins.com/blog/what-is-silver-bullion">popular coins</a> include the Silver American Eagle, the Silver Canadian Maple Leaf, and the Austrian Silver Philharmonic. Rounds, as their name implies, are the same shape as coins, but not official legal tender.</li><li><a href="https://www.texmetals.com/products/silver-coins/junk-silver-bags" target="_blank" rel="noopener">Junk silver bags</a> - These are bags of dimes, quarters, and half-dollars issued by the United States Mint prior to 1965, at which point it switched from using silver in its coinage to other alloys. Anything minted before that time could be upwards of 90% silver, so while it has no collectible value (thus the term "junk"), it does have a value based on its purity.</li></ul>Bullion in its various forms is generally available from precious metals dealers. Be sure to look for a well-established one: <a href="https://www.jmbullion.com/silver/silver-bars/" target="_blank" rel="noopener">JM Bullion</a>, <a href="https://www.apmex.com/category/25800/junk-silver-coins-35-40-90-silver/all?vt=g&amp;utm_medium=cpc&amp;utm_campaign=&amp;utm_source=&amp;gclid=Cj0KCQiAgomBBhDXARIsAFNyUqMkdx1FMwzituxwDc3kxoWMi04ZLEh1BhNZaR3lEsDP37GFgY3zO7EaAlbbEALw_wcBO7EaAlbbEALw_wcB" target="_blank" rel="noopener">APMEX</a>, and <a href="https://sdbullion.com/" target="_blank" rel="noopener">SD Bullion</a> are among the most reputable. Many banks also sell silver bullion. <h2>Silver stocks</h2>You can invest in individual stocks that give you exposure to the silver industry. There are two major types of silver companies:<ul><li>Silver mining stocks - Also called "<a href="https://markets.businessinsider.com/news/stocks/silver-miners-stocks-reddit-first-majestic-wheaton-precious-pan-american-2021-2-1030028701" target="_blank" rel="noopener">silver miners</a>", these are stocks that invest in every stage of silver production, from exploration to refining. So when production is soaring, so are the prospects for these companies - and vice versa, of course. For silver stocks, Camerana recommends Pan American Silver (<a href="https://markets.businessinsider.com/stocks/paas-stock" target="_blank" rel="noopener">PAAS</a>) and Fresnillo (<a href="https://markets.businessinsider.com/commodities/news/fresnillo-shares-drop-on-lower-gold-output-forecast-9741958" target="_blank" rel="noopener">FRES:LSE</a>) , the world's largest silver mining company, which is listed in London. Other major players include Endeavor Silver Corp. (<a href="https://markets.businessinsider.com/stocks/exk-stock" target="_blank" rel="noopener">EXK</a>) and Fortuna Silver Mines (<a href="https://markets.businessinsider.com/stocks/fsm-stock" target="_blank" rel="noopener">FSM</a>).</li></ul><ul><li>Silver streaming company stocks - Instead of digging themselves, some companies make an agreement to <a href="https://www.wheatonpm.com/streams/default.aspx">finance a mining project</a> in exchange for a portion of future profits, which are then meted out to shareholders. <a href="https://markets.businessinsider.com/news/stocks/first-majestic-acquires-silver-stream-on-first-mining-s-springpole-project-1029300031">First Majestic Silver Corp</a>. (<a href="https://markets.businessinsider.com/stocks/ag-stock">AG</a>) is one of the largest streaming companies.</li></ul>You can buy silver stocks as you would shares of any company, via a brokerage, investment app, or online trading platform. <h2>Silver ETFs and Mutual Funds</h2>Instead of relying on a single stock, you can also invest in an exchange-traded fund (<a href="https://www.businessinsider.com/personal-finance/what-is-an-etf-exchange-traded-fund">ETF</a>) or mutual fund that bundles together multiple silver-related assets. Some contain shares of silver company stocks, while others invest in the metal itself or in futures contracts.ETFs and mutual funds are purchased through brokers or trading apps, or through the investment companies that sponsor them.<h2>Leading silver ETFs and what they invest in</h2><ul><li> iShares Silver Trust (<a href="https://markets.businessinsider.com/etfs/ishares-silver-trust-us46428q1094">SLV</a>) (physical silver)</li><li>Global X Silver Miners (<a href="https://markets.businessinsider.com/etfs/global-x-silver-miners-etf-us37954y8488">SIL</a>) (silver stocks)</li><li>Aberdeen Standard Physical Silver Shares ETF (<a href="https://markets.businessinsider.com/etfs/aberdeen-standard-physical-silver-shares-etf-us0032641088">SIVR</a>) (physical silver)</li><li>iShares MSCI Global Silver Miners ETF (<a href="https://markets.businessinsider.com/etfs/ishares-msci-global-silver-and-metals-miners-etf-us4642863272">SLVP</a>) (silver stocks)</li><li>Invesco DB Precious Metals Fund (<a href="https://markets.businessinsider.com/etfs/invesco-db-precious-metals-fund-us46140h5028">DBP</a>) (silver and gold futures)</li></ul><h2>Silver exchange-traded notes (ETNs)</h2>Among the most complex of the silver-centric investment options are exchange-traded notes (<a href="https://www.businessinsider.com/what-is-an-etn" target="_blank" rel="noopener">ETNs</a>) and exchange-traded <keyword id="35149" type="PERSON" weightage="60" keywordseo="commodities">commodities</keyword> (ETCs). They track an underlying asset (in this case the price of silver), like the funds, but the major difference is that ETNs and ETCs are actually debt instruments.A silver ETN operates like a mix between a stock and a bond; when you own it, you own a debt rather than anything physical, which tempers your risk. When the note matures, you get a lump sum tied directly to the price of silver - if it's risen during your possession of the note, you'll see that as a return. The silver ETC is similar, except that it actually holds physical silver as collateral, while the ETN just tracks silver's price moves.Some investors prefer ETNs to ETFs. Both track an index, but ETFs respond more to market investor demand than they do the actual price of the asset. so sometimes ETF investors miss out on gains because the fund fails to accurately move with the underlying commodity - what's called a tracking error. With ETNs, the value is based directly (and solely) off the market price, so tracking errors are vastly reduced. Among ETNs, the VelocityShares 3x Long Silver ETN (<a href="https://markets.businessinsider.com/etfs/velocityshares-3x-long-silver-etn-linked-to-the-sp-gsci-silver-index-er-us22542d2909" target="_blank" rel="noopener">USLV</a>) is one of the best-known. Others include the iPath Silver ETN (<a href="https://www.ipathetn.com/US/16/en/details.app?instrumentId=371397" target="_blank" rel="noopener">SBUG</a>) and the X-Links Silver Shares Covered Call ETN (<a href="https://markets.businessinsider.com/etfs/credit-suisse-x-links-silver-shares-covered-call-etn-us22542d4491" target="_blank" rel="noopener">SVLO</a>).<h2>What's the best way to invest in silver?</h2>Each silver investment method comes with its own advantages and risks.Investing in bullion is traditionally vaunted as the purest form of investment: You own the actual metal, and it can be bought and sold for an amount equivalent to silver's market or <a href="https://markets.businessinsider.com/commodities/silver-price" target="_blank" rel="noopener">spot price </a>per ounce (plus a small mark-up - usually more for coins than bars). But storage and insurance costs mount quickly. And bullion provides no interest or dividends. You can't appreciate any gains on your coins or bars until you actually sell them - hopefully for a higher price. Even then, there are transport costs and other fees to eat into returns. Silver stocks, funds, and ETNs, on the other hand, add some sterling diversification to your portfolio without making you shell out for storage space. They're more liquid, trading daily as they do. And of course, there's the convenience of buying and keeping them in a regular investment account. "Paper silver," as Camerana calls these securities, are "an easy and often less-expensive way to get exposure" - especially if you opt for a silver ETF or mutual fund.But they're an indirect investment. Just as with any company, a silver company's operating costs, reserves, and management all play a factor in its performance; so can the political and economic conditions in its native country. As a result, silver stocks can be volatile, exaggerating the already sharp price swings silver is prone to. Even miners aren't always quite as pure a silver play as one might hope, as silver is often mined alongside or extracted from other metals. <h2>The financial takeaway</h2>What form of silver to invest in depends on your own desire for convenience and appreciation, and your risk tolerance. Owning silver bullion is the most direct, purest play. But owning silver-based securities is more economical and offers a chance at appreciation.While it certainly looks like a promising moment for silver, with its industrial uses predicted to expand in the next decade, there are no guarantees. Silver is vulnerable to recession in ways that gold is not. If the tech industry begins to lag, silver prices will fall, which will hit you in your pocketbook whether you're invested in the physical metal, a silver streaming company stock, or anything in between.Still, silver as a sliver of your portfolio makes sense anytime - as a diversifier, if nothing else. <h2>Related Coverage in <a href="https://www.businessinsider.com/investing-reference" target="_blank" rel="noopener">Investing:</a></h2><h3><a href="https://www.businessinsider.com/is-silver-a-good-investment" target="_blank" rel="noopener">Is silver a good investment? A beginner's guide to silver and the role it can play in your portfolio</a></h3><h3><a href="https://www.businessinsider.com/how-to-diversify-portfolio" target="_blank" rel="noopener">How to diversify your portfolio to limit losses and guard against risk</a></h3><h3><a href="https://markets.businessinsider.com/news/stocks/warren-buffett-bought-3500-tons-silver-made-thomas-kaplan-billionaire-2020-5-1029228443" target="_blank" rel="noopener">Warren Buffett bought 3,500 tons of silver in 1997. The purchase helped make Thomas Kaplan a billionaire.</a></h3><h3><a href="https://www.businessinsider.com/how-to-invest-in-gold" target="_blank" rel="noopener">Beginner's guide to investing in gold: The major ways to buy and trade gold, and the benefits and drawbacks of each</a></h3><h3><a href="https://www.businessinsider.com/how-to-invest-in-silver-advice-precious-metals-chris-blasi-2021-2" target="_blank" rel="noopener">A 20-year precious metals veteran breaks down why Reddit traders' silver squeeze fizzled out - and shares his best advice for investing in the commodity as a bull market remains intact</a></h3>

How to invest in silver, a precious metal that both diversifies your portfolio and rises with new tech industries

<ul class="summary-list"><li>Global <keyword id="6354298" type="DEFINITION" weightage="60" keywordseo="Stocks">stocks</keyword> jumped on Monday as the retail investor army turned a new darling asset: <keyword id="35264" type="COMPANY" weightage="60" keywordseo="silver">silver</keyword>.</li><li>The world's largest silver-backed ETF posted a record $1 billion in inflows as of Friday, the FT reported.</li><li>Silver surfers sent London's benchmark index and UK mining stocks higher on the new short-squeeze.</li></ul>Global shares rose on Monday as retail investors shifted focus to the <a href="https://markets.businessinsider.com/commodities/silver-price">silver</a> market, showing that the Reddit frenzy has spread from stocks and cryptocurrencies to precious metals.The <a href="https://markets.businessinsider.com/index/s&amp;p_500_500">S&amp;P 500</a>, <a href="https://markets.businessinsider.com/index/dow_jones">Dow Jones</a>, and <a href="https://markets.businessinsider.com/index/nasdaq_100">Nasdaq</a> rose between 0.8% and 1%, suggesting a higher open for US market indices later in the day.On Sunday, a group of 10 Republican Senators proposed an alternative economic plan worth $600 billion compared to President Joe Biden's $1.9 trillion relief plan. Although the GOP's latest proposal is much smaller than Biden's, <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword> reacted positively as it suggests talks could get moving again. Silver jumped almost 12% on Monday, from just below $25 to over $30, its highest since last August, as the world's largest silver-backed ETF, the i-Shares Silver Trust, posted a record $1 billion in inflows as of Friday, according to the <a href="https://www.ft.com/content/d46e8623-09af-4a1f-b7e5-207616388b0f">Financial Times</a>."While it is far more difficult to move this market compared to smaller stocks like GameStop, last week's events showed that the impact of the retail frenzy should not be underestimated," said Milan Cutkovic, market analyst at AxiCorp.The impact of the r/wallstreetbets movement caused immense volatility in US markets last week, making short-sellers anticipate further explosion in nostalgia stocks. Volatility was driven by market positioning rather than worries over growth, according to Mark Haefele, chief investment officer, UBS Global Wealth Management.Read More: <a href="https://www.businessinsider.com/stock-market-crash-wallstreetbets-reddit-catalysts-stagflation-inequality-rates-bofa-2021-1">Bank of America warns of 3 looming catalysts that could send the bull market crashing in 2021 - and shares how to position for the 'big change' as the WallStreetBets crowd fights against the system</a>"There is little doubt that huge central bank liquidity and government stimulus checks in the hands of the underemployed/furloughed (through no fault of their own) retail investors will be a big part of this bubble story," said Jim Reid, a managing director of cross-asset research at Deutsche Bank. Silver bulls began to impact prices elsewhere, sending London's benchmark index and mining stocks higher as a result.The UK's <a href="https://markets.businessinsider.com/index/ftse_100">FTSE 100</a> rose 0.8%, the <a href="https://markets.businessinsider.com/index/euro_stoxx_50">Euro Stoxx 50</a> rose 1.3%, and <a href="https://markets.businessinsider.com/index/dax">Germany's DAX</a> rose 1.4%. Miners Glencore and Anglo American, the frontrunner stocks, rose 3% and 2.7% respectively.However, Connor Campbell, a financial analyst at SpreadEx noted there is speculation that Reddit isn't necessarily behind the latest move."Though there are pro-silver posts on WallStreetBets, the 'top post' on the subject is against the trade, claiming that by 'going long on silver, you would be directly putting money into the pockets of the EXACT HEDGE FUNDS ON THE OTHER SIDE OF $GME'," he said. "The same poster also stated that the short squeeze was 'a hedge-fund co-ordinated attack so they can keep fighting the $GME fight'."Elsewhere in Asia, China posted a <a href="https://www.scmp.com/economy/china-economy/article/3119945/chinas-economic-recovery-continued-january-slower-pace-virus">drop in a key business activity index</a> as the resurgence of <keyword id="1754604" type="PERSON" weightage="60" keywordseo="coronavirus">coronavirus</keyword> impacted overall sentiment. The lower Purchasing Managers Index suggests the momentum has slowed for now, although the pan-Asian recovery retains its upward trajectory, said Jeffrey Halley, a senior market analyst at OANDA.China's <a href="https://markets.businessinsider.com/index/shanghai_composite">Shanghai Composite</a> rose 0.6%, Japan's <a href="https://markets.businessinsider.com/index/nikkei_225">Nikkei</a> rose 1.5%, and Hong Kong's <a href="https://markets.businessinsider.com/index/hang_seng">Hang Seng</a> rose 2%.Read More: <a href="https://www.businessinsider.com/stock-picks-to-buy-heavily-shorted-companies-overweights-wells-fargo-2021-1">Buy these 26 heavily shorted stocks as retail traders trigger wild rallies in Wall Street's least-liked names, Wells Fargo says</a>

Global stocks jump as retail investors shift focus to silver after a massive short-seller squeeze

<div class="image-container float_right" style="width:400px"><div class="image"></div><a href="http://www.flickr.com/photos/21185968@N00/3635857758/">flickr / Bonita Suraputra</a></div>Prices again crept gradually higher in Asian trading prior to some retrenchment in early European trading but dollar weakness was supporting gold and <keyword id="35264" type="COMPANY" weightage="60" keywordseo="silver">silver</keyword>.
Further weakness could be seen and it is worth noting that gold and silver saw considerable weakness last December (see chart above) and both bottomed near year end on December 29th prior to strong gains in January 2012.
Support for silver is at $30.67/oz and $30/oz. Gold’s support is at $1,647/oz and below that at $1,600/oz.
Silver will rise as much as 29% to $40.25/oz, from $31.10/oz today, in 2013.
This is based on the median estimate of 49 analysts, traders and investors compiled by Bloomberg.
Global investment through silver backed exchange traded products reached a record 18,854 metric tons in November, or more than nine months of mine output, data compiled by Bloomberg show. Holdings are now valued at about $19.2 billion.
Bullion dealers all over the world report robust demand for silver and there has been a shift in many Asian and Middle Eastern markets from gold to silver - due to silver's relative cheapness and undervaluation versus gold.
According to Bloomberg, one of Singapore’s largest suppliers of coins and bars to retail investors, says sales tripled since October, part of a global surge in demand for silver that drove holdings to a record.
Silver almost tripled since the end of 2008, lagging behind only platinum in gains for precious metals this year as policy makers from the U.S. to China to Europe pledged more action to boost economies. That’s attracting investors betting that stimulus will stoke inflation and debase currencies. It’s also leading to diversification into silver by some who believe that economic growth will strengthen industrial demand for silver, 53% of which is used in everything from televisions to batteries.
Silver advanced 12% to $31.13 this year, compared with a 6.6% gain for gold and 14% rise for platinum. The Standard &amp; Poor’s GSCI Index of 24 commodities dropped 0.3 percent and the MSCI All-Country World Index of equities jumped 14%. Treasuries returned 1.8%, according to Bloomberg.
Hedge funds and other large speculators increased bets on higher prices 12-fold since the end of June, to a net 34,862 futures and options, U.S. Commodity Futures Trading Commission data show. That’s about 50% higher than the average over the past five years, a period during which traders have never been bearish.
Equity investors also believe higher prices are coming.
Shares of Mexico City-based Fresnillo Plc (FRES), the largest primary silver producer, rose 25% this year. The company will report a 22 percent gain in net income to a record $927.1 million in 2013, according to the mean of seven estimates compiled by Bloomberg. Coeur d’Alene Mines Corp. (CDE) in Idaho, which gets about 65 percent of its revenue from silver, fell 6.3 percent to $22.63 since the start of January and will reach $31.89 in 12 months, the average of analysts’ predictions shows.
Investors bought 1,464 tons through ETPs this year, data compiled by Bloomberg show.
Silver holdings in the IShares Silver Trust, the biggest exchange-traded fund backed by silver, were unchanged at 9,871.29 metric tons as of Dec. 19, according to figures on the company’s website.

Prices could go lower should economic growth slow because it would curb demand for consumer goods. A car contains as much as 30 grams and a mobile phone about 0.25 gram, according to the Washington-based Silver Institute.
However, investment and store of value demand for silver looks set to continue to grow at a steady rate in 2013 and this should compensate for any decline in silver industrial demand as it has done in recent years.
The silver market remains a very small market and this continuing global investment and store of value demand should lead to silver reaching a real record high, inflation adjusted, of over $140/oz in the coming years.

2013 Will Be A Huge Year For Silver - Analysts, Traders And Investors Agree

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Reuters</div></div></div><ul><li>Millennials represent the fastest-growing segment of the exchange-traded fund (ETF) market, according to a survey conducted by BlackRock's iShares business.</li><li>Martin Small, the head of US iShares at BlackRock, which oversees more than $1 trillion, has some ideas why.</li><li>He also explains why baby boomers have been slow to adopt ETFs, and how they could be the next frontier of growth.</li></ul> On the website for BlackRock <a href="https://www.ishares.com/us" target="_blank" rel="noopener">iShares</a> - the world's biggest provider of <a href="http://www.businessinsider.com/category/etfs" target="_blank" rel="noopener">exchange-traded funds</a> - there's an <a href="https://www.youtube.com/watch?v=vnQtJ80VJb4" target="_blank" rel="noopener">embedded video</a> that sticks out.It features <a href="https://www.blackrock.com/investing/biographies/martin-small" target="_blank" rel="noopener">Martin Small</a>, who's responsible for more than $1 trillion as the firm's US head, holding an electric guitar. And in between impressive displays of shredding, Small makes an analogy between playing the instrument and investing in ETFs.The connection is simple: ETFs give people unprecedented flexibility in creating portfolios, similar to how the chord combinations afforded by the electric guitar revolutionized music as we know it.<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><a href="http://www.etf.com/">ETF.com</a>Martin Small, head of US iShares at BlackRock</div></div></div>It's a fun three-minute segment - and that's the point. The video is part of a concerted effort by iShares to educate the public on ETF investing, with hopes they'll recognize its merits. And based on a recent survey conducted by the provider, it's working, especially with youngsters.Roughly 42% of the <a href="http://www.businessinsider.com/category/millennials" target="_blank" rel="noopener">millennials</a> surveyed own ETFs, up from 33% last year, the biggest jump out of any category, according to a poll of more than 1,000 people conducted by iShares. Further, 85% of millennials surveyed said they're planning to buy ETF exposure in the next year.These results would suggest that BlackRock and other fund providers have successfully tapped into the millennial market - the fastest-growing segment of the investment universe. So we decided to ask Small to explain why.<h2>'A natural level of comfort'</h2>The first part of his explanation deals with how closely intertwined the maturation of millennials has been with a period of rapid growth for ETFs - a market that saw combined US assets hit $3.3 trillion in November, a roughly $900 billion single-year increase, according to <a href="https://www.ici.org/">Investment Company Institute</a> data.Small points out that the funds have been around for as long as young potential investors may have had an eye on the market."ETFs are about as old as the world wide web, so millennials grew up with them," Small told Business Insider. "They've always been around, so there's just a natural level of comfort."The second relates to an unfortunate reality facing millennials: they're the lowest-earning generation in modern history. This means that they have less money to invest, and a lower cost threshold when it comes to putting that capital to work. And while these factors may initially seem like deterrants, Small thinks cheap-by-comparison ETFs have actually been well-positioned to help youngsters invest."It's a generation that's always had to do more with less," he said. "With an ETF, you can put $100 to work if you want. There are very few mutual fund complexes with minimum investments lower than thousands of dollars."Small also notes that ETFs have done an excellent job mirroring the indexes or strategies they track."ETFs have always kept their promises to millennials," he said. "They've always delivered the market return at low cost, and that's earned a tremendous amount of trust."<div class="KonaFilter image-container display-table"><div><div class="image on-image"><a href="https://www.ishares.com/us">iShares by BlackRock</a></div></div></div><h2>Boomers have been slow to adopt ETFs, but they could be the next frontier of growth</h2>As millennials make up the driving force of ETF adoption, their parents have been far more reluctant to take the plunge.Only 27% of so-called "baby boomers" (aged 52-70) are invested in ETFs, the lowest out of any group, according to the iShares survey. Small says this is likely a byproduct of the huge sums of money sitting stagnant in retirement accounts that haven't yet been "ETF-ized," as he describes it.He also thinks it's possible that boomers have been somewhat spoiled by the ongoing equity <a href="http://www.businessinsider.com/category/bull-market" target="_blank" rel="noopener">bull market</a>, which is now the second-longest on record."They've seen some of the largest names in the market produce super-normal returns," said Small. "That sense of being able to beat the market overhangs some of their thinking. You see less of that from the generations that are on either side."But boomers are far from a lost cause, says Small. He points to the surprising growth in adoption by the so-called "silvers" group (aged 71+), of which 37% are invested in ETFs, almost double the previous year.That spike in adoption is likely a result of silvers increasingly treating ETFs as viable retirement assets, says Small. And he predicts that as boomers start to liquidate their retirement accounts, their ETF adoption rates will see a similar surge."At the end of the day, ETFs are starting to become modular building blocks for retirees," he said. "They're becoming valuable retirement tools. It's a leading indicator of what we could see from boomers in the future." <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/why-some-people-believe-the-world-is-flat-according-to-an-astronomer-2018-1">This is why some people believe the world is flat, according to an astronomer</a></h3> <div> </div> </div>

Millennials are leading an investment revolution - and we spoke to the head of a $1 trillion provider to find out why

As the exchange-traded world continues to expand, many investors find themselves asking the same questions about how these products work. Of course, not everyone is as vocal about their curiosities, leaving a number of unanswered questions in the space. In an ongoing effort to keep you educated about the ETF world, we mapped out ten questions you may have been too afraid to ask [see also <a href="http://etfdb.com/wp-content/uploads/2012/04/Free-Report-3.pdf">How To Pick The Right ETF Every Time</a>].
<h3>1. What Is An ETF?</h3>
It seems basic, but as <keyword id="46594" type="PERSON" weightage="60" keywordseo="ETFs">ETFs</keyword> continue to grow in popularity, more and more investors find themselves <a href="http://etfdb.com/2012/what-is-an-etf/">asking this question</a>. An ETF is basically an ownership stake in a pool of assets. When an investor buys an ETF share, he or she is buying a small percentage ownership of a large portfolio of stocks, bonds or other assets. ETFs allow a large number of investors to basically “share” in a larger, more diversified portfolio than they could assemble on their own.
<h3>2. What’s the Difference Between ETFs and ETNs?</h3>
While both are prominent structures for exchange-traded products, there are several differences between ETFs and ETNs that investors should know before investing. First off, ETNs are debt instruments and are at the credit risk of their issuer, whereas ETFs do not face this issue. While it is rare for an ETN to suffer from credit risk, it is worth noting that Lehman Brothers had several ETNs at the time of their demise in 2008.
Next comes taxes. ETNs will always issue a 1099, as will most ETFs. But certain ETFs, like those that hold futures, will issue a pesky K-1 come tax time. Also, ETNs are <a href="http://etfdb.com/2011/when-etns-are-better-than-etfs/">always taxed</a> at 15% for long-term capital gains and 35% for short-term capital gains; this figure often varies for ETFs. It is also worth noting that ETFs can exhibit tracking error, while ETNs will never incur this issue. Finally, as a debt instrument, ETNs will mature one day and liquidate, by design, back to shareholders. The <a href="http://etfdb.com/2011/when-structure-matters-etf-etn-or-other/">structure of a product</a> has a huge impact on its exposure.
<h3>3. What is Tracking Error?</h3>
Tracking error, simply put, is the delta between the performance of an ETF and the change in the underlying index. Perhaps the simplest source of tracking error is the expense ratio of an ETF; funds operating at full efficiency can be expected to trail their underlying index by a margin equal to the bottom line fees charged. Indexes are hypothetical measures of performance that are not directly investable–there is no associated management fee or other expense components.
Sometimes the culprit is thin trading volume, as some products can go days without trading, which does not allow their price to accurately reflect the index at the current time. Other times a rebalancing of the underlying index may mean that the fund does not have enough time to catch up. Read more on <a href="http://etfdb.com/2011/why-etf-tracking-error-occurs-and-how-to-avoid-it/">how tracking error is caused</a> and how to beat it.
<h3>4. What Happens When an ETF Shuts Down?</h3>
As more and more ETFs hit the market, it is inevitable that some will be forced to close their doors. It costs money to run an ETF and after a certain point it becomes too expensive for an issuer to keep the product open. An ETF closing is not cause for panic; you’ll have the opportunity to either sell your shares prior to the delisting or to receive your share of cash proceeds. That may be less than optimal; the sale may trigger some tax liabilities, and there are costs associated with redeploying capital. But overall, an ETF closure isn’t really a big deal. Read more about how to <a href="http://etfdb.com/2011/how-to-deal-with-etf-closures-qa-with-paul-weisbruch/">handle closures</a>.
google.load('visualization', '1', {packages: ['corechart']}); function drawVisualization() { // Create and populate the data table. var data = google.visualization.arrayToDataTable([ ['Year', 'Launches', 'Closures', ], ['2009', 137, 56, ], ['2010', 231, 49, ], ['2011', 310, 38, ], ['2012', 177, 104, ], ]); // Create and draw the visualization. new google.visualization.ColumnChart(document.getElementById('visualization74221')). draw(data, {title:"ETF Launches and Closures By Year", width:600, height:400, hAxis: {title: "Year"}} ); } google.setOnLoadCallback(drawVisualization);
<h3>5. What’s Up With Leveraged ETFs?</h3>
Leveraged ETFs and ETNs have been the subject of much debate over the past few years. Many will look at the long-term performance of a leveraged product versus its underlying index, and be left scratching their heads when the returns do not exactly line up with the leverage the fund presented. It is all based on the reset frequency of the product, and most leveraged funds reset daily. This means that the fund is only designed to provide its levered exposure for one trading session, not over a long period of time.
There are some monthly resetting products and some that never reset, but daily leverage is the most popular option currently available. <a href="http://etfdb.com/2011/lessons-from-the-leveraged-silver-etf-agq/">This article</a> takes an in-depth look at reset frequencies and why these trading products are so misunderstood.
<h3>6. Does Weighting Methodology Really Matter?</h3>
Absolutely. There are many different strategies that encompass the ETF space: equal, RAFI, earnings, revenue, dividend and AlphaDEX are just a few of the methodologies that have struck a chord with investors. The weighting of your fund makes a fundamental difference to the performance of the fund. Take the S&amp;P 500 for example; below we compare the performance of several different funds that all put a different spin on the popular index.
<table id="portfolioreturn" align="center">
<tbody>
<tr><th colspan="3">Alternative Weighting At a Glance</th></tr>
<tr>
<td>ETF</td>
<td>Weighting</td>
<td>2012 Return</td>
</tr>
<tr>
<td style="text-align: left;">SPDR S&amp;P 500 (<a href="http://etfdb.com/etf/spy/">SPY</a>)</td>
<td>Market Cap</td>
<td style="text-align: center;">15.99%</td>
</tr>
<tr>
<td style="text-align: left;">Large Cap Fund (<a href="http://etfdb.com/etf/RWL/">RWL</a>)</td>
<td>Revenue</td>
<td style="text-align: center;">17.91%</td>
</tr>
<tr>
<td style="text-align: left;">Earnings 500 Fund (<a href="http://etfdb.com/etf/EPS/">EPS</a>)</td>
<td>Earnings</td>
<td style="text-align: center;">14.58%</td>
</tr>
<tr>
<td style="text-align: center;">LargeCap Dividend Fund (<a href="http://etfdb.com/etf/DLN/">DLN</a>)</td>
<td>Dividend</td>
<td style="text-align: center;">12.74%</td>
</tr>
<tr>
<td style="text-align: left;">FTSE RAFI US 1000 (<a href="http://etfdb.com/etf/PRF/">PRF</a>)</td>
<td>RAFI</td>
<td style="text-align: center;">16.80%</td>
</tr>
<tr>
<td style="text-align: left;">S&amp;P Equal Weight ETF (<a href="http://etfdb.com/etf/RSP/">RSP</a>)</td>
<td>Equal</td>
<td style="text-align: center;">17.16%</td>
</tr>
<tr>
<td style="text-align: left;">Equal Sector Weight ETF (<a href="http://etfdb.com/etf/EQL/">EQL</a>)</td>
<td>Equal Sector</td>
<td style="text-align: center;">14.43%</td>
</tr>
</tbody>
</table>
As is clearly evidenced above, though these funds all track the same parent index, the way they slice and dice the holdings makes a big difference on bottom line returns. Check out a more in-depth explanation of the <a href="http://etfdb.com/wp-content/uploads/2011/12/Alternative-Weighting-Methodologies-Webinar.pdf">various alternative weighting methodologies</a>.
<h3>7. Does a Slight Difference in Fees Matter?</h3>
While it may seem like a minute difference, a couple of basis points over time can be a big deal. The ETF industry seems to pride itself on offering the most competitive prices for investors, as a battle of cost-cutting has ensued in the past few years. As a result, some funds, like VWO, have been able to outdo competitors that track similar holdings. One popular comparison comes between two physical gold ETFs, the iShares COMEX Trust (<a href="http://etfdb.com/etf/IAU/">IAU</a>) and SPDR Gold Trust (<a href="http://etfdb.com/etf/gld/">GLD</a>); the former charges 0.25% and the latter 0.40%.
Consider two different million dollar portfolios, one which is wholly invested in GLD and the other doing the same for IAU (obviously a diversification nightmare, but stick with us). The GLD portfolio will incur annual expenses of $4,000, while its competitor will shell out only $2,500. That $1,500 difference seems minuscule for just one year, but drag it out over a 30-year investment and the difference between fees amounts to $45,000, or 4.5% of your original investment. Saving yourself a quick 4.5% could have been as simple as buying IAU over GLD. Read more about this <a href="http://etfdb.com/2011/cost-competition-inflows-surge-for-cheap-etfs/">cost battle</a>.
<h3>8. How Are ETFs Treated Come Tax Season?</h3>
The answer to this question depends entirely on the underlying exposure of the fund. Some products, like physical precious metals funds, are taxed as collectibles at 28%. Others are given the normal 15/35 treatment, and still others are subject to other rates. Investors will also want to note that structure will often dictate whether or not they are issued a K-1 or 1099 come tax time. Our <a href="http://etfdb.com/etfdb-category/large-cap-blend-equities/taxes/">comprehensive database</a> provides you will all of the tax information you will need to make an informed decision.
<table align="center">
<tbody>
<tr><th colspan="3">ETFs That Issue A K-1</th></tr>
<tr>
<td>Ticker</td>
<td>ETF</td>
<td style="text-align: center;">Expense Ratio</td>
</tr>
<tr>
<td style="text-align: left;"> <a href="http://etfdb.com/etf/AGQ/">AGQ</a></td>
<td style="text-align: left;">Ultra Silver</td>
<td style="text-align: center;"> 0.95%</td>
</tr>
<tr>
<td style="text-align: left;"> <a href="http://etfdb.com/etf/BNO/">BNO</a></td>
<td>United States Brent Oil Fund</td>
<td style="text-align: center;"> 0.75%</td>
</tr>
<tr>
<td style="text-align: left;"> <a href="http://etfdb.com/etf/BOIL/">BOIL</a></td>
<td>Ultra DJ-UBS Natural Gas</td>
<td style="text-align: center;"> 0.95%</td>
</tr>
<tr>
<td style="text-align: left;"> <a href="http://etfdb.com/etf/CANE/">CANE</a></td>
<td>Sugar Fund</td>
<td style="text-align: center;"> 1.00%</td>
</tr>
<tr>
<td style="text-align: left;"> <a href="http://etfdb.com/etf/CMD/">CMD</a></td>
<td>UltraShort DJ-UBS Commodity</td>
<td style="text-align: center;"> 0.95%</td>
</tr>
<tr>
<td style="text-align: left;"> <a href="http://etfdb.com/etf/CORN/">CORN</a></td>
<td>Corn Fund</td>
<td style="text-align: center;"> 1.42%</td>
</tr>
<tr>
<td colspan="3"><a href="http://etfdb.com/2012/etf-tax-tutorial-complete-list-of-etfs-that-issue-a-k-1/">See the full list here</a></td>
</tr>
</tbody>
</table>
<h3>9. Why Invest in an Index?</h3>
Gone are the days when active management was the best decision for investors. Actively-managed mutual funds consistently fail to beat the market; nearly 86% of the time when expenses are factored in. Index funds provide investors with a better long-term exposure and at a much lower cost to boot. While there certainly are individuals who can beat the market, studies have proven over and over that index funds outperform their competitors the vast majority of the time.
<h3>10. Are ETFs Better Than Mutual Funds?</h3>
Better is not the right term to use in this situation, despite how frequently this question is asked. Every product is different depending on your objectives, but there are a number of factors that set ETFs apart from their mutual fund counterparts. ETFs are cheaper, more transparent, allow for margin buying and short selling, and offer more control over capital gains, for starters. The list of differences goes on and on, but at the end of the day the only person who can decide which product is better is you. Take a look through some of the <a href="etfdb.com/2009/etfs-vs-mutual-funds-five-trends-show-that-etfs-are-winning/">key differences between these two investment vehicles</a>.
[For more ETF analysis, make sure to sign up for our <a href="http://etfdb.com/newsletter/">free ETF newsletter</a> or try a <a href="http://etfdb.com/pro/">free seven day trial to ETFdb Pro</a>]
Disclosure: No positions at time of writing.
<a href="http://etfdb.com/2013/10-questions-about-etfs-youve-been-too-afraid-to-ask/">Click here to read the original article on ETFdb.com.</a>
 
Read more posts on <a href="http://etfdb.com">ETF Database »</a>

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