Benefits of ETF vs Physical Silver

[Robert]

Can someone please explain the benefits of ETF vs Physical Silver?

thanks

[bellevuebully]

Can someone please explain the benefits of ETF vs Physical Silver?

thanks



The bankers love you more when you purchase paper?

[MrSilverAG]

you dont have to worry about thugs breaking into your house and stealing your safe if all you have is paper silver ETF
its easier to invest your 401k into an ETF than physical

downsides, if everyone tried to cash in their ETF silver and take physical delivery the comex would default because there isn't enough physical.

also Mike Maloney points out that at the low in 2008, if you were holding paper ETF silver, your silver was worth less than $9, but the same day, due to shortage in the physical market, 1 oz American Eagle coins were selling for $35 each on eBay. so as you see in a shortage of physical, holding the paper is not where you want to be

[bellevuebully]

I should give you a serious reply now.

Investing in pretend is never advantageous. It may seem so, until the pretend becomes reality.

We are in the midst of a paper obligation global abortion. Investing in paper assets that likely have no physical backing is not, imo, a very prudent move.

At the very least, if one has to invest in paper, buy large cap mining stocks. At least there is a headframe and scooptram to back up the stock position.

[Sparky]

The primary advantage of ETFs is that they are easier to buy and sell if you are interested in trading the price swings of precious metals on a regular and frequent basis. You can trade the price instantaneously inter-day, and put in automatic stop and limit prices. There's not storage cost or inconvenience. You don't have to look for a buyer, or pay shipping charges.

The downside is that you own a promise, like paper money. They're fine, until/unless the system falls apart, then they're useless. They don't serve as "insurance" the way physical does. They're like owning the "rights" to a knife or a gun when you actually need to protect yourself unexpectedly. Plus, you can't fondle ETFs and clink them around in your hands.

Trade paper. Hold physical.

[Quixote2]

SLV for trading, a round trip investment (buy - sell) costs me $16.00 for any amount.

A physical round trip costs me 7-8% at my local coin shop.

Physical (in your possession) for keeping as long term insurance.

That said, I use CEF for investment trading precious metals, also $16 round trip. The CEF price indicates a premium of about 8% over spot price but you recapture that premium when you sell.

CEF holds gold and silver in vaults with a ratio of 50 oz silver for every oz of gold. (CEF = Central Fund)

Who knows what the actual SLV physical holdings are; unencumbered, encumbered, nonexistant, or what.

[madfranks]

The primary advantage of ETFs is that they are easier to buy and sell if you are interested in trading the price swings of precious metals on a regular and frequent basis. You can trade the price instantaneously inter-day, and put in automatic stop and limit prices. There's not storage cost or inconvenience. You don't have to look for a buyer, or pay shipping charges.

The downside is that you own a promise, like paper money. They're fine, until/unless the system falls apart, then they're useless. They don't serve as "insurance" the way physical does. They're like owning the "rights" to a knife or a gun when you actually need to protect yourself unexpectedly. Plus, you can't fondle ETFs and clink them around in your hands.

Trade paper. Hold physical.



I was pretty much going to say the same thing, that paper silver is good for the convenience of lots of trades. But when you own paper silver, you are not relying on the precious metal for your security, you are relying on the promise of those who say they have it for you. Promises can be found to be worthless, physical silver in your hand will never be.

[osoab]

The primary advantage of ETFs is that they are easier to buy and sell if you are interested in trading the price swings of precious metals on a regular and frequent basis. You can trade the price instantaneously inter-day, and put in automatic stop and limit prices. There's not storage cost or inconvenience. You don't have to look for a buyer, or pay shipping charges.

The downside is that you own a promise, like paper money. They're fine, until/unless the system falls apart, then they're useless. They don't serve as "insurance" the way physical does. They're like owning the "rights" to a knife or a gun when you actually need to protect yourself unexpectedly. Plus, you can't fondle ETFs and clink them around in your hands.

Trade paper. Hold physical.



I was pretty much going to say the same thing, that paper silver is good for the convenience of lots of trades. But when you own paper silver, you are not relying on the precious metal for your security, you are relying on the promise of those who say they have it for you. Promises can be found to be worthless, physical silver in your hand will never be.


The only thing I would add is that in the States the ETF are taxed at the collectibles rates where stocks are not. Robert is in the UK, so he would need to look at what his tax code is.

[cpy911]

Any thoughts on Sprott Physical Silver Trust ET (PSLV)? If you are stuck in a 401K or retirement fund, it may be an alternative. Also, you can transfer some of your IRA/401K holdings to Sterling Trust and have them hold your PM's within your retirement account. I have heard of people taking possession of their coins from Sterling Trust (After paying the IRA retirement penalties of course). I have some of both with some of my funds still stuck in the IRA. Theoretically, I can liquidate and take delivery of the PSLV and Sterling Trust holdings. Beware, the PSLV is a large bar that costs big FRN's to obtain. The coins in Sterling Trust are allocated to me and I can and might take delivery at some point down the road.

I no longer put money in a "retirement" account though. I just pay the taxes up front (lose the tax deferment) and buy what I want and put whatever I buy wherever I want. I am fairly certain in the next 30 years when I want to retire, that IRA's/401K's etc will be controlled and distributed by the government. I would rather put what I want wherever, even if it means a boating accident on the horizon. ;D

[Sparky]

The only thing I would add is that in the States the ETF are taxed at the collectibles rates where stocks are not. Robert is in the UK, so he would need to look at what his tax code is.


To clarify, only the ETFs that hold bullion (e.g. GLD, SLV, etc.) are taxed at the collectible rate. Mining ETFs and leveraged ETFs are not.

GDX is a good proxy for the miners, GDXJ for the junior miners. I don't like GLD or SLV; when I want to trade the bullion price, I'll use one of the leveraged ETFs, like DGP or AGQ.