I posted an article last week about purchasing ETFS Physical Silver (SILV), a silver ETF, and First Magestic (AG), a silver miner.  There is quite a difference between the two and I would like to explain when it is best to get into both.

First, the silver ETFs follow the silver price.  Some of them hold physical silver like SILV and others purchase silver futures.  I recommend SILV over other silver ETFs like SLV because it has a lower expense ratio.  Since silver prices are quite low and inflation is in the works, I feel that the price cannot go down much lower.  The gold-silver ratio is also over 80 which means there is a higher chance that silver is bottoming out.

Next, I recommended First Magestic (AG).  This is a silver mining stock that is quite low and I do think it is finally hitting a bottom.  There is additional risk in silver miners as a lower silver price means the stock goes down much quicker than silver ETFs.  This also means when the silver price goes up that silver mining stocks can go up to 3x or 4x higher.

I recommend getting into both at this time.  If you don’t like the additional risk, I recommend purchasing the SIVR silver ETF.

The gold-silver ratio has broken the 80-1 threshold.  This ratio usually implies that the silver price is so low that its time for a reversal which means higher silver prices coming soon.  To play this speculation, I recommend either getting a silver ETF such as SIVR which has the lowest expense ratio or SLV which is a popular silver ETF.  The volatility on both these ETFs are rather low so I don’t see much downside.  I also think if there is a recession or inflation that silver will go up in price.

For those that like leverage, silver miners are a great way to take advantage.  First Magestic (AG) is at a 52-week low and it continues to go lower!  I do think it should be bottoming soon especially if silver prices start rising again.  You do have more risk but if silver prices goes up then this will spike up 3-4 times more than the silver ETFs.