Isra-Mart srl: Investors have many ways to buy silver

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Dillon Gage Metals: As silver reached a recent high of $48.48 an ounce this spring, owners who had bought the metal 10 years ago -- when it was less than $5 an ounce -- saw a tenfold increase.

"As the price of gold escalates beyond many investors' budgets, they're turning to silver in a variety of ways," says Terry Hanlon, president of Dillon Gage Metals in Dallas. One approach is to buy basic coins, including American Eagles, Canadian Maple Leafs, Austrian Philharmonics and Australian Kookaburras. "These coins are excellent choices because they have good liquidity, with fairly low purchasing premiums."

In today's turbulent markets, precious metals are one of the few, true safe havens, he says. Many investors want to own silver and gold as insurance against the diminishing value of other investments and assets.

Silver has a positive set of supply and demand factors, Hanlon notes. In 2010, world silver jewelry purchases grew by over 5 percent to a five-year high, according to GFMS in London. That helped lift the metal's total fabrication demand by nearly 13 percent to a 10-year high of 878.8 million ounces. Photographic usage of silver fell last year but had its smallest decline in six years as medical users reconsidered converting to digital photo systems, GFMS said. Meanwhile, global mine production of silver rose 2.5 percent last year.

Hanlon says, "I recommend owning the real thing." Silver bullion is a good investment because of its currency-like properties. "The average premium that you're required to pay for silver bullion items is generally pretty low," he continues. "I suggest that investors buy the basic coins from recognized world mints or bars in one-ounce, 10-ounce or 100-ounce sizes, with well-known hallmarks, such as Royal Canadian Mint, Engelhard or Johnson Matthey."

As alternatives to investing in coins and bars, funds or managers of pooled money offer shares in silver. One investment vehicle is iShares Silver Trust ETF or SLV, Hanlon states. Another option for those who prefer to own paper is the Sprott Fund out of Toronto, backed by silver stored in Canada. And, of course, another avenue is buying silver futures contracts. Dillon Gage has a division specializing in commodity futures markets for this purpose.

Silver's all-time high was $50 an ounce, reached in early 1980. Many commodity fund managers are buying the physical metal, and some of them are eying targets of $50 and higher, comments Hanlon.

For small investors, Hanlon recommends buying basic bullion items, such as silver American Eagles or Canadian Maple Leafs. "Choose a reputable dealer who's been in the business for awhile, has credentials and stands behind its products," he suggests. "You can call the U.S. Mint for a list of recommended dealers." Dillon Gage will assist customers who wish to conduct buying or selling transactions greater than $10,000.

Always ask questions when buying silver, he advises. "When you're inquiring about silver's selling price, also ask about the firm's buyback prices and policies," Hanlon urges. "And understand that buying coins and bullion is done for long-term investing and to offset your other assets and investments. So try not to worry about any minor price setbacks in silver."

If storage is a concern, you can place your coins or bullion in a metals depository, like Diamond State Depository, owned by Dillon Gage Metals and located outside of Wilmington, DE, Hanlon says.