Investors Abandoning Paper Silver To Buy Physical Silver

Silver exchange-traded products (ETP) are typically known as paper silver. When someone buys ETP, he is buying paper silver and NOT physical silver. Some might argue that silver ETPs are backed by physical silver but I would keep this simple. When you buy silver ETP, do you receive physical silver? The answer is NO, that means you are buying paper silver. Simple.

Take a look at the black color bar, the addition to silver ETP (paper silver) is getting less and less since 2009. In fact from year 2010 to 2011, there is a negative growth for paper silver. Clearly, the investors no longer want to put money into paper silver.

Take a look at the orange color bar, investors have tripled their silver bullion purchases since 2007. The investors are buy more and more physical silver and abandoning their paper silver because they sense something wrong with paper silver.

Data showed gold sales for the whole year in 2012 were 525,000 oz. Silver sales were 2,449,000 oz just for the month of October 2012. For the whole year, silver sales were 28,244,000 oz. In other words, silver sales  is 54 times higher than gold. The gold silver ratio in earth crust is only 10 times more but investors are buying silver 54 times faster. How long can this sustain? Don’t be surprised that one day when you wake up, there is no more silver left for you to buy.

Silver is cheaper than gold. However it tends to follow the same upward trends. This would make silver an attractive alternative for investors. In fact, silver has even proven itself to outperform gold. Silver is a finite resource with infinite usage. The opportunity in physical silver is enormous. It is one of the most undervalue precious metal known to man.

Investors who understand what is happening already parking their wealth into physical silver, what are you waiting for?

Practical Guide For Investing Silver In Malaysia is the No.1 eBook available in Malaysia to show you how to invest in silver. The investors around the world are moving their wealth into physical silver, not paper silver. If you want to learn the best way to invest silver in Malaysia, click here to find out more:

8 thoughts on “Investors Abandoning Paper Silver To Buy Physical Silver

  1. You mentioned about something wrong with paper silver. Could you elaborate more what’s wrong with paper silver? I’m invest only in paper silver, and i find the paper silver is simple and easy to handle. Kindly enlighten. Thx

    • Hi Jasmin, if you are investing in paper silver, you are potentially missing out the whole point of silver investment :)

      Can you share with me, what is the primary reason you are investing in silver?

      If I may, I will share with you what is the primary objective I’m investing in silver. The No.1 reason for investing in silver is because silver shortage of silver is going to hit globally as early as 2020. Silver is the 2nd largest traded commodity after oil. Silver has very unique characteristic such as anti bacteria and being the best electrical conductor that has no replacement. Silver is monetary metal and has been used as money for the last 5000 years. Unlike gold which is mainly being hoarded (kept or stored as somewhere), silver is being used in battery, solar panel, car, computer, hand phone, RFID chips, washing machine, water purification, any many other usages. In fact silver has more than 10,000 known applications. Physical silver is a finite resource with infinite usage. All the above that I mentioned is only applicable for physical silver and not paper silver. When a manufacturer need physical silver to produce more products in the factory, will paper silver going to help?

      If you got time, you can consider reading up on “JP Morgan silver price manipulation”, what they essentially manipulating is the paper silver market. If for whatever reason they smack down the price to $5/oz, that’s the price you will have to sell back in your platform (because no one else is going to buy the paper from you except the platform you are trading on). However if you are holding physical silver, the game totally changed, you hold it and you own it. You can sell to anyone anytime at fair market price (base on demand and supply), not the manipulated price. When shortage of silver hits, people will be chasing after physical silver, not paper silver because paper silver can be simply “created” within seconds while the shortage of physical silver is a matter of time.

      • I read some of your post and i started investment in silver via maybank. The reason i choose it is because i’m heavily traveling and difficult for me to arrange for buy/sell of physical silver.

        From what i understand, the silver is very low and there are much room of raise. Therefore, i started with the investment which will give better return than FD.

        If that case, are you recommend i sell off my paper silver and start with physical silver? or it should 30% in paper and 70% in physical silver?

        • In my previous posts, I high-lighted some of the disadvantages for Maybank. The main factor that turns most silver investors off is the 9+% spread. You save money in FD to receive 3-4% interested AFTER a year. You keep your money in EPF to receive 5-6% AFTER a year. But when you buy silver from Maybank, you IMMEDIATELY lost 9+%.
          You can refer here for more information on Maybank Silver Investment Account:
          http://silverinmalaysia.com/maybank-silver-investment-account/

          If you have already bought the paper silver in Maybank, just keep it and pray it will increase in price to at least breakeven. The damage is already done, there is nothing else you can do for those money that you have invested. For you next purchase you should really consider physical silver.

          In regards to allocation between paper and physical, I would suggest you to set the allocation base on volume rather than percentage. Let’s say you live in a house that have sufficient space or do no mind using the service of private safe company, 1000oz would be a good number to keep as physical. Once you hit that limit and feel it is too troublesome to keep and store too many silver, then only consider buying paper silver.

          Personally, I will go 100% into physical silver.

    • Hi James,

      There are many options for you to buy silver in Malaysia. If you are conservative buyer and looking for valued-for-money silver bars, you can consider going to 1StopGold (opposite KLCC, behind Bank of China) and MySmartGold (Old Klang Road, behind Wisma Rockwills). They have a physical office with tight security that can deal with you face to face.

      If you are comfortable with online transaction, you can consider buying from forums, Facebook group pages, or even website like BuySilverMalaysia.com and APMEX.com. Typically online dealers’ prices are more competitive than those that have a physical office, for the obvious reason because the overhead is lower. Having say that, it doesn’t mean all silver are cheap online. I do know couple of websites selling silver with big margin.

      But before you proceed, I have to remind you, each of these dealers and each type of silver have their own pros and cons. For example, large silver bar (1 kilo) has low premium, comes with a unique serial number and certificate, which is a valued-for-money good buy. The concern is large silver bar is harder to be liquidated (sold off to realize profit) when the exist time comes. If you want an easy sell, you can sell back to the dealer, however the spread is 10-15% which means you are cutting your your profit down by 10-15%. So, my suggestion is try to avoid large size bars.

      There are many such tips and tricks when come to physical silver investment, which I’m afraid I cannot cover all in a single reply. I did write down many investment strategies, tips and tricks, how to buy silver below market price and other relevant silver investment information in my eBook: Practical Guide For Investing Silver In Malaysia. It is a 100+ pages eBook complimented with 2 special reports (Quick Start Guide & Overseas Purchase Toolkit) which will give you a good head start for your silver investment. You can get the eBook here:
      http://tinyurl.com/silver-ebook

      I have received many good feedback on the eBook, I’m sure it won’t disappoint you too 😉

  2. Pingback: Why Silver Price Dropped Last Night (3rd Nov 2012)Silver In Malaysia

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