Wednesday, September 21, 2011

Five Silver Stocks To Watch : EXK, PAAS, SLV, SLW, SVM

During periods of crisis, investors often flee risky asset classes and invest in assets or commodities that they feel will hold value. Silver is a prime example.
Silver is relatively rare and it is respected across borders; therefore, unlike currencies, it is believed to hold its value over time. While silver is not as popular as gold as a store of value, it has signifcant usages in various industries. It is this industrial demand that have convinced some that silver may be stronger investment than gold in the long term. The question is, what's the best way to invest in it?

Investing in Silver
While collecting jewelry with a high silver content or silver coins is the method preferred by some, there are downsides to consider. For example, there is the issue of finding a safe place to store such merchandise. Finding a buyer for a particular piece may also be difficult. Plus, there is sometimes a very big markup on certain pieces.

But there is an alternative for investors who want to gain exposure to silver: the stock market. Check out these five simple silver stock plays.

Company/ETF

Market Capitalization

Year to Date %

Silver Wheaton Corp (NYSE:SLW)

14.5B

+4.87%

Silvercorp Metals Inc. (NYSE:SVM)

1.23B

-45.28%

Endeavour Silver Corp. (NYSE:EXK)

1.06B

+40.89%

iShares Silver Trust(NYSE:SLV)

12.21B

+28.66%

Pan American Silver Corp. (Nasdaq:PAAS)

3.51B

-21.16%


The Risks
The price of silver can fluctuate widely. In 2008, the price of silver had risen to about $21.44 an ounce, a huge increase given that just a couple of years prior it was trading around $11. But not too long after that spike, silver lost its luster, and the price floundered to $8.40. However, today, silver has popped up to around $40.

Bottom Line
Investors tend to flock to precious metals (like silver) in times of market crisis. Widespread international acceptance and recognition of this circumstance makes it likely that this trend will continue in the future. Adding a little silver to your portfolio might help you mitigate risk; the five stocks presented here are a great starting point for your silver stock search. (For further reading, check out A Beginner's Guide To Precious Metals.)

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