Gold or silver?

As I stated above, put a card in your shirt pocket, easily readable, "I buy old coins!"

Most contacts will come from general flea-market sellers who might have just a few pieces still in the truck, or buried under a lot of other junk. You are simply letting them know to strike up a conversation about coins. Unless it's a screaming bargain that you're afraid someone else will buy, you look at the coins, say "Very nice, but I want to see as many other coins as I can before I decide." As you walk away, the Seller says, "You can have them right now for $x.xx but I'm putting them on display so they may be sold by the time you get back..." It's all a game I've played many times.

 

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Very smart but I wouldn't want to walk around with a card on my shirt... Are there any other ways of letting them know? Can you just walk up to random stands and ask them if they have old coins?

 

It's perfectly fine to start buying some PM, in whatever form you choose, for $100. What you shouldn't do is be looking at it as a quick investment that will perform well in the short term. If you enjoy the stuff, buy away. But as others have said, one would usually need to hold their bullion for quite some time to realize any kind of profit, and even then, it may only do so well as to keep up with inflation, and will likely not outperform the stock market (IMHO).
Get some stuff that you think is neat, and see if that gets you motivated to continue. You have to enjoy it to make it worthwhile.

 

If you are looking for a quick flip I would not invest in either. The premiums you pay will put you in the hole 10 to 20% right off the bat meaning if silver spot price is $20 and you pay a $4 premium per oz you are negative 20% as soon as you buy it. So the spot price would have to be $24 when you sell just to break even and that is even if they give you spot price when selling. Could silver go to $40 an oz in a year.....sure it could and you would make $16 an oz but it could go down and or stay flat in a years time and you would be down $4 or more per oz. Instead of buying gold or silver. I would take that $100 and hit the banks and buy up some half dollars and do some coinroll hunting. You wont lose your initial investment. If you find one 1964 or older (90% silver) they are worth around $8 each for the silver value and years 1965 to 1970 (40% silver) are worth around $3.25 each at the current spot price. If you dont find any troughout the year you still have your $100. Check out the coinroll hunters forum on here to learn more.

 

When I was a kid, coin roll hunting really paid off. Nowadays, I'm not so sure, because 90% of "all dates" has been cut off (the silvers). You are reduced to looking for tiny die varieties and defects that no one seems interested in buying. That said, it is a conservative approach and you're not likely to lose money. Yes, you might find an occasional silver half, especially the 40% variety. But banks HATE roll hunters, and seldom cooperate, even if you have an account. Once upon a time, it was great fun.

The other problem is, you quickly run out of new rolls to examine. The few rolls of halves the bank has today, have probably been sitting there for several years. Nobody wants halves, and they don't circulate in commerce. Look through those few rolls, and you're effectively finished, and good luck trying to talk the bank into ordering more. I still like prowling the flea markets, where there's fresh meat every weekend.

 

I read everyone's comments and I thought about what I said earlier about how I wanted to only keep them for a year and I changed my mind, If I can buy silver at $20 to $25 an oz, I can get 4 oz right now and then get an oz every paycheck and just stash it away in my safe... How long do you guys think I should keep the silver for to make some profit? I agree one year is to little for anything to go up in value, what about 3-5 years?

 

no one can say for sure...

 

You buy (junk) silver NOT to trade it, but to preserve the purchasing power of the money you already have.

Here's the explanation that seems to make sense to most people. Let's say that right now, a loaf of bread costs $1.80 (yes, there's cheaper bread; read on). Let's say that's one silver dime. Hyperinflation comes, and a loaf of bread costs $5. The theory is that silver will rise in value proportionally to inflation, so a loaf of bread STILL costs a silver dime. You have preserved the buying power of your savings. Consider yourself lucky that you break even, or may even make a little profit. You do NOT sell your silver at the end of X years, because you will be receiving rapidly-depreciating paper money in return. That's the theory. It's the best theory that stackers have.

 

The future is uncertain, therefore this question cannot be answered.

 

True... but...

Not everyone is looking to just preserve wealth. Some do trade silver for profit and not to preserve.

 

Here's one more part of the theory. The gold price/silver price (per ounce) is near a historic high, over the past century. This suggests that gold is over-priced, or silver is under-priced. Either explanation indicates that you'll do best investing in silver, as the price ratio reverts to the mean. Also, (junk) silver is already in small, convenient denominations for bartering or for everyday commerce. Even if you have the smallest gold coin, a 1/10th ounce, available from various countries, who's going to "make change" for a coin even currently worth in the $140 to $180 range?? Better to have a silver dime, worth in the $2 range, give or take. The one drawback, a big hoard of silver is a pain to store and conceal.

 

I've seen 10 times more people lose money TRADING silver, than make money trading... And, of course, in trading smallish quantities, the premium eats up all the profits. Even postage (if sent away) eats up all the profits. I have, in effect, "converted" some of my retirement savings into silver, and I am perfectly content to let it sit, indefinitely. My storage costs are well below ½% per year; I can live with that, considering that the alternative is to have no protection against hyperinflation whatsoever.

 

Yes, one benefit of silver versus gold is its greater granularity.

The price ratio between silver and gold is something to consider, but the correlation is greater than the non-correlation. So if you believe gold is overpriced, than silver is most likely overpriced also - from historical a historical standpoint.

 

I do not disagree that silver "could" drop another 20% during this extended correction. But I am in this for the long term, not for X years, and not for purposes of trading.

 

Trading anything for profit, whether equities or commodities, is not easy. Most people do fail. That doesn't mean everyone fails. Therefore the point I make is still valid. Which is silver is not only beneficial for preserving wealth. It can also be traded to produce wealth (profit).

 

Oh so you guys don't go into investing to make money but to preserve it... I think that is also a great idea. Since I was a little kid I have always wanted gold/silver and now I actually want to fulfill my dream. So any reason to buy silver will be good for me. But what if silver goes down? I (and I'm sure everyone else) wouldn't want to invest money in something that will go down in value. Do you think buying silver now is a good idea or a bad one? Also I don't really want to buy junk silver as in candle sticks and stuff, I would buy silver coins just cause I'm a coin collector and I love them!

I know that no one can really predict where gold/silver will go but what do you think?

 

That's great. We all have different objectives. I just wanted to point out that 'you only buy silver to preserve purchasing power' is not accurate. That's all.

 

Junk silver traditionally means COINS only, not candlesticks and silverware, etc.

And, it usually means dimes, quarters, and halves. It excludes war nickels (35% silver) and silver dollars, which contain 7% more silver than (say) four silver quarters, but for which you pay considerably more than a 7% premium. See www.coinflation.com for details.

Here is a graph of gold vs. silver price over the past ten years. I would rather have posted a 100-year graph, but could not find one without a lot of extraneous, confusing notes written all over it. You can see we're about in the middle of the 10-year range, i.e., what they call a reversion to the mean.

 

IMO, forget the flea market idea. You're new to this and you have no idea what things are worth or how to spot a fake or what the precious metal content of the coins are. My advice would be to check out APMEX or Provident Metals and buy online. These are very large well known precious metals dealers that will guarantee that the products they sell are authentic. With $100 you should be able to buy about 4 one ounce american silver eagles. These coins are made by the US mint and are the most recognized and liquid silver bullion round in the US. Buy 4 of them and stick them in a drawer somewhere and forget about them for 5 or 10 years. You'll do well.

 

Here's a little math for everybody. Let's go back 100 years. A 1914 $20 gold piece contained 0.9675 Troy ounces of pure gold. A 1914 half dollar contained 0.3617 Troy ounces of silver. A $20 gold was "worth" 40 half dollars.

==40 half dollars contained 14.468 ounces of silver;
==1 double eagle contained 0.9675 ounces of gold;

therefore, 1 ounce of gold was worth 1.0336 x 14.468 ounces of silver = 14.9540 ounces of silver,
or a price ratio, based on circulating coinage, of about 15 to 1, compared to today's 60 to 1.