I am a complete newbie to coin collecting and/or investing. My name is Frank, and I am 56 years old and thinking of opening a precious metals IRA. I am also interested in collecting silver and gold coins for a personal collection. Are U.S. Mint silver proof coins such as the March of Dimes coin a good investment for increased value in the future, or better looked at as a collectors coin to be appreciated for what it is? I have 2 friends, one buys from the mint and has for years because he likes the hobby, the other has bought beaucoup amounts of silver in preparation of Armageddon. I am in favor of both reasons for buying precious metals but being new to this I need more info before I do anything. Seems to me the U.S. mint gets a lot of money for 1 oz of silver. Thanks.
I would never trade a sandwich for a hunk of metal if Armageddon comes, nor would I place a bet that any modern "instant rarity" from the mint were a wise choice for an invest. Sure, some modern mint products can turn a profit, but that should be the last reason that you would purchase a coin.
Don't buy from the mint as an investment. They ask too much for gold and silver. If you are collecting coins for the fun of it, the mint has some cool stuff. Coin collecting is not a great way to invest.
Here's one generality to consider. If and when the price of silver skyrockets in the next few years, the substantial premiums paid for Mint products will evaporate, and an ordinary silver dollar and a Marine Corps dollar and a Boy Scout dollar, etc., will all be worth the same, and Mint products, unfamiliar to the average person, may even be hard to use in commerce, if it comes to that. On the other hand, they are wonderful works of art to be admired and enjoyed until the economy goes in the ditch. I have never bought any bullion other than common 90% dimes, quarters, and half dollars, and the vast majority has been dimes. No aesthetic value whatsoever, in other words, and no foreign silver, like Britannias, Philharmonics, or Maple Leafs, etc. And especially no bars or rounds.
doug5353, just wondering why dimes? If one was going to stack silver, why not quarters or half dollars?
Glad you asked. It makes sense to "stack" the smallest unit of silver you can, so that a vendor or speculator doesn't have to try to "make change," which could be a deal-killer. Today, at Kroger's, a loaf of bread costs from $1 to $1.25, and that's roughly the value of a silver dime. Way down the line, you walk in with a silver half, and the guy says, "I can't make change for a half; I'll give you one loaf of bread, a jar of grape jelly from 2017, and a jar of peanut butter..." Meanwhile, he's thinking, "Take it or leave it!" Remember the whole purpose of stacking is not to make money, although you might, if you're lucky. It's to preserve the purchasing power of the money you already have, as well as an alternative way to hold capital other than depreciating paper money. There's folks on CT who think they're smarter than the good citizens of Greece, Turkey, Germany, Hungary, Bulgaria, Zimbabwe, Argentina, China, etc., etc., all of whom have seen their paper money go virtually worthless at some point since the 1920s. And these same folks have zero control over what happens. A stacker simply believes that the average person is better off with a substantial part of his liquidity in precious metals instead of paper promises-to-pay. The middle class has already taken a BIG haircut since 2007, and it can happen again. The goal, in simple terms: prepare, but hope nothing happens. Anyone here with Hungarian grandparents? Ask them about 1946-47, when it took over a quadrillion forints (their monetary units) to buy a loaf of bread, and prices changed four times a day. Despite the "strength" of the American economy, there are already some deflationary trends, such as the falling price of oil, copper, aluminum, and coal. In the worst case, first you get deflation (which destroys commerce), later you get hyperinflation (which destroys households). One last point; in the past 3 months, the premium (for 90% silver) has gone from $1 to about $4, spot compared to retail. See Apmex or Provident. Why do you think this happened? And a month's wait for delivery. This is the new normal.
Hmm. Two out of four ain't bad, I suppose. Sure, shooting quotes from the archive isn't much more sporting than shooting fish in a barrel. But the point I'm trying to make is that all the canards about "a silver dime/quarter has always bought a loaf of bread" and "an ounce of gold has always bought a fine toga/suit" strike me as silly. I can go to Kroger today and find a loaf of bread priced at $0.99 (I assume -- I know eight-packs of burger buns are $1.00). I can also find loaves priced at $4.29 (but I usually buy them when they're on sale at half that), and I'm sure that I could find some on the top shelf or in the organic section that are even higher). If "the price of a loaf of bread" is anywhere between $1 and $6, it's easy for you to pick out a loaf of bread that's equal to the melt value of a silver dime (or, today, a silver quarter). It's also easy for me to pick out a loaf that costs (today) four or five silver dimes. It's a weak benchmark. In the decades I've paid attention, I've seen bread prices (denominated in dollars) go up, mostly gradually, and only very rarely go down at all. I've seen silver prices go all over the place. I've seen it go up to nearly $50/oz twice. I've also seen it languish near $5/oz for nearly 15 years (1990-2005). If you bought during that time, it's done a good job of preserving value. If you bought during 1980 or 2011, it's done a terrible job. If you buy today, how much of your value will be preserved next year, or in 2020, or in 2040? I wish I knew.
As for dimes vs quarters or halves, I find that premiums on quarters and halves tend to be higher than dimes -- a roll of halves costs more than a roll of quarters (with the same face value), and either one costs a bit more than two rolls of dimes. I've assumed it's because dimes lose weight as they circulate more quickly than quarters, which in turn wear away more quickly than halves.
All this hand-wringing trends away from the real question. If you're going to do it at all, do it so as to simplify transactions down the line. Don't sabotage your efforts by stacking something that makes it difficult for sellers to deal with you, or puts you at an immediate disadvantage. Some people hoard ammo. They don't buy ALL .50 caliber, or probably ANY, for that matter. Same concept. Some people hoard food. They don't buy 4-gallon plastic buckets of baked beans. This has nothing to do with whether it's a good idea or not. And bread is the perfect analogy, because everybody understands bread, and buys it frequently.
If times get so bad that I'm standing in line to buy bread, I'm not going to care if its whole wheat or 100% organic, I just want bread and I'm not going to want to be standing there haggling with change. I also don't want the guy behind me to see I've got a couple half dollars. Give the person their dime and get the heck out of there!!!
That is indeed the Hope - that prepping will simplify your life until things straighten out. Now think of the people who have never bought the first dime of 90%.
