Hey guys, Im fairly new to coin collecting, and personally I am interested in silver coins as they are a good investment (in my opinion), and cool to look at. Now I see some people running around buying junk silver coins like mercury dimes and pre 64 washington quarters, and I have also seen people buying highly priced graded coins. Which is the better investment? I also see some "rounds" and bars that are 1 oz .999silver, like an American Silver Eagle, except they are by a private mint. Are these a good idea? They seem very risky to me, as they arn't backed by any credible institution. Also if this is already a thread, if someone could post me a link, that would be kind of you. Thanks again! Will
There are plenty of threads on this but ill give you a quick rundown. Sorry if my ideas are a little mixed around, but I hope this helps. Also keep in mind that everyone has a slightly different view on the .999 vs 90% and generic rounds/bars vs. gov't minted coins. Myself? I have an even mix of 90% junk silver and .999 . And The way I look at it, generic rounds and bars are the same thing. Really It depends on your reasons for investing. If you think you might ever need to barter, or if you think the price of silver may skyrocket, you want to be heavier in Junk silver because of the small denominations. Avoid any 1/2 ounce rounds or anything less than 1 ounce. The premiums are WAY too high generally. Junk silver fills this purpose perfectly. Personally, I hold half my silver in .999 bullion (ASE's, Maples, and Philharmonics, which ever are cheaper/ these all are gov't minted) and the other half is held in Junk silver (MOSTLY half dollars, but with a moderate mix of quarters and dimes too... The half dollars can be had in AU-uncirculated condition). I would also stack a few 5 or 10oz generic bars. I really like to diversify. If you buy your generic rounds (non mint backed) from a credible mint, you will be fine. For investing purposes I would avoid "art bars" (random bars with random artwork on them), unless you can get a great deal on them. Apmex rounds/bars, sunshine, NWTM, Pan Am are all fine, they are highly recognizeable and you should have little trouble selling them. somone else will have to give some other names here cause i'm drawing a blank but there are many reputable names. Oh and for mostly all purposes, I have to say never buy graded bullion.. So in summery, Buy about half of your stack in junk silver at spot price or slightly under. Buy the other half in .999. I buy mostly gov't minted because I believe they will retain their premium when I go to sell. Plus theres no question its legit. But if you can get a good deal on generic rounds, don't be afraid to buy them. There are many benefits to buying from a local coin shop, so do your best to find one, and establish a good relationship. Also try to find a local coin shop where you can "cherry pick" (pick out what you want from a selection) the best looking junk silver coins with the least amount of wear (the figure .715 ounces per $1 face value figures in for wear, so if you buy almost uncirculated half dollars, your already ahead). Buy mostly half dollars (although some dealers charge more for them, most don't), and then quarters and dimes.
Let me add that any generic bars you buy make sure they are clearly stamped their purity and weight. they should clearly read 999, or .999, or 999 fine silver, and their weight. All silver and gold is measured in troy ounces or grams. Also, the difference between a round and a coin is a coin is a gov't minted round piece, such ase ASE's, Maple leafs, and Philharmonics, these generally have a small nominal face value. A Round is a round piece of bullion made by a private mint, these are for all intensive purposes, the same thing as a bar. In fact many mints sell versions of there 1 ounce bullion in matching bars and rounds. personally, I like to buy them in bars, because its easier to differentiate them from all my gov't minted coins. I know I have given you alot of information, but these are alot of points that you should explore further. There are many threads on junk silver you can search for, or rounds vs. coins. Good luck. If your going to be holding silver for the LONG haul, I think now is a great time to enter.
Dan8802, Thanks so much for the detailed response, your information is very much appreciated to a new collector. I had one question though, I have heard of this .715 oz per $1 thing, but I don't think I completely understand it, could you elaborate? Will
Sure thing. The way we measure how much silver is in a pile of 90% is actually very easy. For every $1 Face Value (aka 4 quarters) there is .715 ounces of silver. The great thing about it is that it doesn't matter if its half dollars, dimes, quarters, or a mix of all. All you have to do is add up how much these coins "face value" is worth then multiply by .715 then by the spot price of silver. So if you have a half dollar and 2 quarters, OR 2 quarters and 5 dimes you have .715 ounces of silver. so a half, quarter, and dime would be a face value of $.85 X .715 =.60775 ounces of silver. This goes for quarters, halfs, and dimes, minted 1964 and prior. When buying, I always go for the newest or best condition coins. This comes from the fact that there is about 715 ounces of silver in a $1000 face value bag of quarters halfs or dimes. Now .715 accounts for a normal amount of wear, brand new coins would have about .723 of silver Morgan silver dollars and Peace dollars have .77 ounces per coin.
No problem If you have any questions just ask.. And like I said I'm sure you'll get alot of different opinions, and alot of usefull information. Everyone here is very helpfull.
If your goal is to invest in bullion purely for the silver melt value, then stay away from graded/slabbed coins. Yes there are bullion coins that are graded, but you'll pay a premium for them, and will have a much harder time getting your money back out of them. Dan8802 has given you some great advice. If you don't want to do the math to calculate the melt value of your silver coins, there are some great on line calculators that will do it for you. Here's a link to my favorite. http://www.silvercoinstoday.com/silver-calculators/us-silver-coin-calculator/
I don't exactly consider American Silver Eagles to be silver rounds...I think of rounds to be like silver buffaloes and other non government issued bullion... I prefer ASE's and junk silver myself... just try to get Silver Eagles with a low to no premium...universal coins and bullion and their sister companies always have "specials" and if you use multiple addresses you can stack up alot I got some of those canadian grizzlies and wolfs for under what spot is now and they have a fairly large premium on them... keep in mind...buy the specials but ignore the other sells pitches...there's plenty of ways to get more bullion out there like this just have to keep your eyes open
I like bars for investment purposes, rounds for collecting and 'smaller change', and junk silver as 'smallest change'. I am weighted about 60%, 35%, 5% respectively. Although rounds include generic .999 as well as more well known ASE's, Maple Leaves, Pandas, etc. which have a higher premium. I am probably half and half in that regard. I don't bother with graded coins except for a handful of numismatic pre-1964's, and try to avoid premiums unless it's more for collectibility. I figure if it came down to having to melt some bullion, I'll be happier having not paid a premium. Plus if there is ever a shortage of buyers for whatever reason, you may not get your premiums back anyway. As for .999 rounds from unknown mints, all you really need is a scale to prove the weight.
Thanks everyone for your advice, it's good to see things from as many different sides as you can so you can make a knowledgeable decision.
I would also add, keep your receipts. Not only do they help give credibility if you decide to sell, but you will need to prove what you paid in order to avoid having to pay tax for the full sale amount as opposed to just your profit, or if you were to take a loss it's the difference between no tax or being taxed for the full sale amount.
