Silver is a precious metal which as historically taken second place to gold, but only to gold.
It's valued for many decorative uses, including jewelry and knick knacks of various kinds.
It is useful for tooth fillings, photographic film and various industrial applications.
However, that tends to outweigh silver's emotional connotation as a store of monetary value, much like gold.
Until 1965, United States dimes, quarters, half-dollars and dollars were 90% silver.
However, the price of silver got to the point where those coins were worth more for their silver content than for their face value.
Silver's price really took off in the 1970s, along with gold and many other commodities.
Its price rise went along with gold's fast climb to $800.
However, silver going from $11 or so an ounce in 1979 to almost $50 an ounce was due to primarily to manipulation of the market by the Hunt Brothers.
They ultimately failed to corner the silver market, and the price collapsed back to where it started.
This hurt many people who bought silver on its way up.
This event occurred at the end of a decade where price rises in commodities were ordinary events and mainly attributable to economic events.
Presently silver is rising, thanks partly to worldwide economic problems.
Like gold, silver tends to rise in times of uncertainty.
However, there are practical problems associated with direct ownership of silver.
If you own silver coins, they can be stolen.
Same with silver bullion.
You can store coins and bullion, but then you're paying out money to continue to own it.
You can also buy shares of stock in silver mining companies, but then you have the additional risk that the company is poorly run or simply has an inventory of poor mines.
They can lose money even as the price of silver is rising.
On April 21, 2006 iShares launched its Silver Trust (NYSE:SLV) exchange traded fund.
The fund owns a reserve of silver.
If you buy shares of the ETF, you have ownership interest in those reserves -- all 304,000,000 of them.
It has over nine thousand tonnes of silver in trust.
The fund's expense ratio is 0.
5%.
Anyone considering investing in silver whether through SLV or some other way, should bear in mind that its price has fluctuated a lot over the years.
Sometimes people say that there's a natural ratio of the price of gold to the price of silver, and that when silver's price is below this ratio it's cheap compared to gold.
However, there's probably no cosmic law dictating the relative values of gold to silver -- only the marketplace.
Because silver has many industrial uses, its price also fluctuates with economic events in those industries.
That is, with supply and demand.
Therefore, it may be overly simplistic to conclude that just because you see a lot of economic turmoil and the value of the US dollar going down, that means silver is a good investment.