Investing in old dollars to try and safeguard against dropping silver prices?

Discussion in 'Bullion Investing' started by hertsmatt, Feb 20, 2013.

  1. hertsmatt

    hertsmatt New Member

    Hi guys I'm a new investor and have some silver 999 rounds but am trying to buy older dollars Morgan/peace/liberty etc as I'm hoping they will have a steadier uphill value due to numbers decreasing etc, I'm looking to hold onto these for around 15 years for my kids, is this worthwhile? I can buy rounds for what I'm paying for old .7 troy oz Morgan dollars but my thinking is the Morgan's and other old dollars will appreciate faster? Is this the case in your opinion?

    id love to hear how much value your old dollars have accrued in 10-15 years?
     
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  3. rush2112

    rush2112 Junior Member

    If your buying Morgans, be prepared to weigh and measure each one.

    Same for the Peace dollars.

    I use to buy a few up here in Canada, but now avoid them all together.
     
  4. wkw427

    wkw427 Member

    They'll always have some premium over their silver content, unless of course silver drops to less than $1/oz.. which won't happen, period.
     
  5. hertsmatt

    hertsmatt New Member

    In my fairly small experience we don't seem to be as hard hit with fakes over here in the uk, I've had a few fakes pop up on ebay but luckily with the expertise on here I haven't parted with any cash for them, people seem to be pre-occupied with british coins :) thanks for the advice! And let's hope your right on the wont go below $1 oz haha
     
  6. Pi man

    Pi man Well-Known Member

    I would love to see $1/oz silver! ALL MY SAVINGS would go into that, mainly since that is around face!
     
  7. cpm9ball

    cpm9ball CANNOT RE-MEMBER

    I think you're going to find that the Morgans that have enjoyed a decent increase in value are the scarcer date/mm, and these will cost you considerably more to start. The common dates have remained relatively stagnant for almost a decade.

    Chris
     
  8. Rono

    Rono Senior Member

    Hertsmatt,

    If you're in the UK, look towards bullion from home and the continent. You could start acquiring silver crowns for older stuff and current world bullion. I'm stateside, but love britannias, koalas, libertads, pandas, phillies, etc. I really think that diversification is important in all things and that includes bullion investing.

    peace,

    rono
     
  9. Revi

    Revi Mildly numismatic

    I like Peace Dollars. They are rarely counterfeited, and will surely go up in value. You can usually get common dates for around the cost of a 1921 Morgan, and they sometimes are worth far more. The same goes for Morgans. I like the culls and the ugly ones, because they can be picked up near their silver value and are worth more than that already. I also like foreign silver. My faves used to be 8 reales, but people have realized how cool they are and it's hard to get one anywhere near silver value any more.
     
  10. medoraman

    medoraman Supporter! Supporter

    "Investing in coins". Bad, bad idea. If you want to invest, invest in investments, (stocks, bonds, land, etc). If you wish to diversify then having some money in pm is not a bad diversification plan. However, collectible coins are a HORRIBLE investment. Problem really is the buy/sell spread. The difference between what you buy a coin and what you sell it for is huge, huge enough to usually wipe out any potential gains, or mute it so much that you took a huge risk for almost no return.

    Collect coins for fun. Yes, there will be some value there when your kids inherit them, but never count on it as an "investment". If you want to pass down to your children some silver dollars, ok, but consider it an expense today, not an investment.

    I might be sounding harsh, but WAY too many people delude themselves that their hobby is really "an investment for my kids", and spend money that would be better off in their 401k fund. Spending money on coins is fine, I just spent $500 last night, and $800 the night before that on coins, but I never allow myself to be coerced into thinking "this is for my kids". Its for ME, for my HOBBY. If they get to sell them in the future, good for them, but that is NOT the reason I bought them.
     
  11. Revi

    Revi Mildly numismatic

    Unfortunately I agree with Medoraman. I think it makes some sense, in a rising silver market, to buy some "mildly numismatic" silver coins, but making money on really numismatic coins has never worked for me. I can never seem to sell the big ones for what they are worth. It's fun, but not too remunerative.
     
  12. medoraman

    medoraman Supporter! Supporter

    Is it that bad to have to agree with me? ;)
     
    Revi likes this.
  13. justafarmer

    justafarmer Senior Member

    The best time to invest in silver collector grade coinage is when silver prices are high and rising. The ratio between collector value and metal value (sure wouldn't use inherent value here) usually constricts.
     
  14. statequarterguy

    statequarterguy Love Pucks

    All of the above was true at one time. With the advent of the Internet and sites like eBay, the buy/sell spread we were stuck with because we had to deal with traditional B&M dealers, no longer applies. Find a “deal” on eBay and instantly realize a profit by reselling on eBay. I look at coins as a hobby to enjoy and an investment, albeit a high risk investment, but not as risky as pm’s alone. Ones knowledge of coins is a huge advantage to realizing significant profits investing in collectable coins.
     
  15. medoraman

    medoraman Supporter! Supporter

    What is the cut of Ebay? 10%? Cheaper than traditional, but still pretty steep. Sure, vest pocket dealers have always tried to make some money, but that is what you are describing, being a semi-dealer. Most collectors never achieve enough knowledge to do that. So what you are saying is true, Ebay makes the cut less, and vest pocket dealers have always been around, so nothing new, but that I do not believe invalidates what I said earlier. Its still true for the majority of collectors.
     
  16. medoraman

    medoraman Supporter! Supporter

    True sir, but then you are also taking the PM market risk. The reason they constrict is collectors are not willing to pay the pm premium.

    Your idea would work best if someone hedged the pm risk. Buying in a high pm market, hedge your downside risk, and if pm went down you gained on the numismatic spread widening.

    This is why I warn everyone that if they want to invest in PM buy only very low premium coins. Do not get swayed by paying higher and higher premiums, because these premiums will disappear as, (as you hope), pm goes up. Barbers coins used to bring a premium, but at $35 plus silver they were junk. Now that silver is back down they bring premiums again. Well, if you want to maximize your gain in pm, buy the most pm, which means paying the smallest premiums possible.
     
    Last edited: Sep 26, 2014
  17. Blaubart

    Blaubart Melt Value = 4.50

    Wouldn't the opposite be true? If silver dropped under $1/oz, the numismatic value of Morgans and Peace dollars would far exceed their silver value. But if silver went up to $50/oz, you would probably have a hard time selling common examples for more than melt.
     
  18. Blaubart

    Blaubart Melt Value = 4.50

    Any time I can find genuine Morgans/Peace dollars for less than spot plus 10%, I jump on them. It happens every now and then, but not too often, and less often now that silver is down from where it was recently. I view doing so as a safer buy than buying other forms of bullion, because even common dates should realize some numismatic premium if silver drops dramatically.

    Even if silver drops below $1/oz, I can't see people spending Morgan/Peace dollars to buy groceries any more than you see people spending Indian head cents and Buffalo nickels today. But if silver is below $1 an ounce, then run of the mill silver rounds will certainly trade for under $1.

    If the price of silver continues downward, you'll likely see the dollar amount of premiums stay the same or even increase. On the flip side, if silver goes up, you'll probably see the premium stay the same or decrease, which means other forms of silver bullion would have been a better choice.

    Considering that random date Morgans/Peace dollars sell pretty easily on ebay starting at $25, buying them for $18 each (just over spot plus 30%) doesn't sound like too bad of a deal. If you had the inclination, you could probably even turn a small profit flipping them.

    All that being said, which would be more fun to hand to your kids in 15 years? A one ounce silver round from some silver company, or a 150 year old coin? The answer of course is: Both! :D
     
  19. Revi

    Revi Mildly numismatic

    There's no way that silver will drop to a dollar an ounce. The value of silver has risen with inflation. It still buys as much stuff, and sometimes more than it did when it was a dollar an ounce.
     
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