Why are bullion rounds better than numismatic coins? What's your thoughts in here? Or do you think it's really better?
It all depends on what you are looking to accomplish. Bullion rounds are better if your main interest is maximizing the metal content while minimizing the premium you’re paying over spot. Here are a few examples of a bullion round buyer 1.portfolio diversification 2.hedging against inflation 3.you are bullish on gold and silver 4.You want to bury gold and silver in your back yard because you don’t trust the government and your just waiting for the day when global markets collapse and currencies are only worth the paper their printed on. On the other hand a numismatic coin buyer is someone who would most likely fall under the second list 1. You are a collector and want to invest in a coins rarity and condition rather than its melt value. 2. you rather not be up 24 hours a day watching the metals market spike up and down continually wondering when to buy or sell (this would be an extreme case) Personally I think bullion type coins are better not only because the long term outlook is positive, but also Numismatic coins have so many other factors that can effect whether the value goes up or down. 1. Large telemarketing firms like to pick certain numismatic products and drive prices through the roof over night only to end up lower than when they started. 2. lets say you buy a rare date St Gaudens graded MS65 and the grading services show only 10 coins known. 10 years later someone finds a hoard of the same dated coin in a safety deposit box. Your now rare piece has become more common and inevitably drastically changing its collectable value. I think there is also the misconception that when buying numismatic type coins you are getting the best of both worlds. On one hand the coin has a collectability aspect and on the other hand it has its metal value. People dont realize even when the metals market is surging the numismatic market can crumble. Investors in both markets are likely to sell down collectable holdings and increase their bullion positions.
Even a bullion can have a premium associated with it (rare date pandas') even more so than some numismatic gold coins', so it is more of a question whether you want to pay a premium or get something at spot price. If you are bullish on precious metals you want to get coins as close to spot as possible, since premium generally tend to decline in relative if gold/silver prices go up.
Buying and owning numismatic coins is more of a hobby than an investment activity, although at times it can be both when you can purchase something of genuine quality at a price that you believe is much less than it will be in the future. It takes a lot of time and study to be even reasonably good at it. Silver rounds require only that you be able to identify counterfeit rounds and not overpay.
Actually as far as premiums that is only true if the PM dealer you are buying from does not hedge their inventory which all the "big guys do." When the larger bullion houses buy for example Gold Eagles from the US Mint the coins are always priced to them at a percentage over the melt value, so when metals prices go up so does the premium over spot.
