This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

An ETF for a Sliver of Silver

Investors looking to diversify their portfolio with precious metals should consider the iShares Silver Trust (SLV), an ETF that tracks the value of physical silver held for the fund in a London branch of JPMorgan Chase (JPM). While silver shouldn't amount to a large segment of an investor's portfolio, a small position in silver helps to diversify stock-heavy holdings.

If you want to go with silver, SLV is the place to be. It is large, with more than $4 billion in assets, and liquid, with an average daily trading volume of 9.4 million shares. The size of the fund facilitates trading and investors won't have a hard time getting in and out of SLV. While the PowerShares offering DB Silver Fund (DBS) tracks a pool of futures contracts, SLV tracks physical silver -- the kind you can pick up and look at. SLV's methodology skirts the difficulties that can arise with trading futures contracts and has the added benefit of actually having a physical stock of the commodity you're invested in.

Before SLV, retail investors were limited to using silver mining stocks and some precious metals mutual funds to gain exposure to the price of silver. The alternative was to buy items, like jewelry and coins, which can be impractical to buy and store. Institutional investors had the option of investing in silver futures contracts, like the ones that make up DBS, if they were not restricted from using derivatives.

A stronger dollar has recently caused a resistance level in gold and silver prices. The trend of a rising dollar and falling silver prices is one that prospective SLV investors should be attuned to. Consumer price index numbers released Wednesday may have temporarily eased inflation fear and the dollar fell in Wednesday trading while silver and gold rebounded. The inflation question is still at large, however, as investors worry that the unfurling of the stimulus package and subsequent flood of cash could drive inflation higher.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,563.30 -317.06 -1.88%
S&P 500 1,930.67 -39.40 -2.00%
NASDAQ 4,369.7730 -93.1290 -2.09%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs