How To Invest In Silver Using Silver Mining Stocks

If your like most investors you have thought about investing in silver, but all the promotional hype has made the process very confusing. The recent price run up of precious metals has made silver investing a hot commodity for many investors. Once you decide to invest in silver the next decision is what is the best way to invest. I feel it makes the most sense to invest in silver companies that discover and produce silver. This investment can be implemented by buying mining stocks that can be purchased through your brokerage account. The reason I find silver stocks attractive is because their highly leverage to the price of silver. Even after the recent spike in the price of silver, the metal is way below its all-time high of $50 an ounce. This means silver companies revenues and profits should continue to increase while expenditures stay relatively flat.

Focus on companies that are already producing silver as many of them are still prospecting and are not producing any silver at all and may never produce silver, which gives them a much higher risk profile. Some of my favorite silver mining stocks are listed below for your analysis. Please go over your stock ideas with your advisor before making any purchases. Also, I own some of these silver mining stocks and could increase or decrease my holdings at anytime.

At the top of my list is Silver Wheaton Corp (NYSE: SLW). The company acquires silver purchase agreements, silver purchase agreement is simply a right to receive a percentage of production from a mine. By investing in a silver purchase agreement, Silver Wheation buys a percentage of the metal produced from a given property in exchange for a front end payment, without assuming any responsibility for the actual mining operation. Thus, the Company does not have to contribute to the operating and capital costs at the mine. Silver Wheaton recently said it might start issuing a small dividend in early 2011.

Some other silver mining stocks to check out are: Pan American Silver Corp (NASDAQ: PAAS), Silver Standard Resources Inc. (NASDAQ: SSRI), Silvercorp Metals Inc (NYSE: SVM), Coeur d'Alene Mines Corp., (NYSE: CDE), Mag Silver Corp. (NYSE: MVG), Hecla Mining Company (NYSE: HL), Endeavour Silver Corp. (AMEX: EXK), Alexco Resources (AMEX: AXU), Goldcorp (NYSE: GG), Gammon Gold (TSX: GAM) and Excellon Resources (TSX: EXN)

I expect silver mining stocks to continue increasing in value, with corrections along the way, over the next 4 to 6 years. Picking the right silver mining stock to invest in will be the hardest part of your silver investment decision. Again, make sure to consult your investment advisor before purchasing any stocks.

By: AndreB

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Andre Bradley is a contributing writer to the website www.StockAdvice101.com. Looking for free stock advice, stock market tips, stock market strategies? Look no further, learn how to trade and invest for the long-run.