Exchange Traded Funds (ETFs)

ETF Talk: Digging Up a Silver ETF

“Gold and silver have always had value, never gone to zero. Can you say the same for stocks and bonds?” — Mark Skousen

The above pearl of wisdom from my friend and Fast Money Alert co-author Dr. Mark Skousen underscores the constant allure that precious metals have had to human beings throughout history.

Precious metals, especially during inflationary times, have held their value, while the value of fiat money issued by central banks drops, often precipitously. That is why I always recommend to my Successful Investing subscribers (and if you aren’t one, why aren’t you?) to have a bit of golden shine in their investment portfolios.

It’s also why, every year when it comes time to register for my favorite event of the year — FreedomFest — Dr. Skousen will offer you an opportunity to obtain an American Eagle Silver Dollar for yourself. Stay tuned!

Even in the most troubled and darkest days of human history, the opportunity, wealth and power that come from possessing gold and silver have never stopped gleaming like adventure to a courageous man’s eyes. But King Midas can keep his golden touch. I’m interested in the other precious metal here — silver — in the form of the iShares Silver Trust (NYSEARCA: SLV).

In short, this exchange-traded fund (ETF) focuses on reflecting, as close as possible, the price of silver, which provides a handy way for investors to own silver without having to worry about the complexity and expense of securing or transporting the metal itself.

The fund’s assets are almost completely in the form of silver bullion held by the fund’s custodian — JPMorgan Chase — alongside a very small amount of cash when necessary. Here, it is also worth pointing out that the fund does not act to take advantage of fluctuations in the price of silver. If you’re looking for an actively managed fund that does buy or sell silver when appropriate, it would be best to look elsewhere.

Exclusive ETF Talk: Finding Value in Your Brokerage

As of Sept. 11, SLV has been up 3.76% over the past month and is currently up 19.10% year to date.

Chart courtesy of www.stockcharts.com

The fund has amassed $13.73 billion in assets under management and has an expense ratio of 0.5%.

At the same time, silver (like any commodity) has another side that can tarnish its shine. The price of silver can be affected by changes in the global economy, due to silver’s many industrial and commercial applications, as well as changes in interest rates and the supply of silver itself. So, it’s important to carefully consider the risks and potential returns before making any investment decisions.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Forecasts & Strategies, Tactical Trader, TNT Trader, Five Star Trader, Bullseye Stock Trader, and The Deep Woods. His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.