Junk Silver, Silver Bullion, or Starting a Coin Collection

Hey, I was curious what you guys all thought about investing in coins. I currently have some cash saved up and I kinda want to start investing in silver.

My questions are:
1) I have some junk silver, but would you guys recommend selling that all and buying silver rounds or bars or just continuing to accumulate random junk silver?

2) I would like to start collecting Morgan Dollars; however, its one or the other. Either I start the MD collection or I invest in silver, and I'm not sure which one is in my better interest in terms of financial investing and pleasure of coin collecting

2b(not really a question)) I realize the the Morgan Dollars are also silver, but I wanted to make a nicer set around MS64 grade (even though I'll never be able to finish it at that grade). I guess I just want to know the numismatic value investment vs the straight up silver investment pros and cons

Thanks, a Silver & Coin Noob

 

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There's almost zero connection between buying junk silver and collecting high-grade Morgans.

Sunday, the spot price for silver dollars was $13.88 each. Most of the Morgans you buy will surely cost $50 and up. You would never sell them for silver content, in fact even in the best case, silver would have to go up about 4x just to break even.

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Further, if you sell junk silver to buy rounds and bars, you will end up with less silver than you have now, due to the premiums involved, and lackluster demand for 90% at the present time...

Do you see the problem here? Study:
www.coinflation.com which also has dozens of articles (from many sources) on coin collecting, bullion stacking, banking, economics, government, and risk evaluation, etc.

There's no reason you can't do both things, but if you sell your junk silver to buy Morgans, you'll find that's a "conflict" too.

 

I agree with Doug. I just wanted to add that collecting coins and keeping a small pile of junk silver can go hand-in-hand. A pile of 90% silver (roosies, washingtons, franklins, etc) makes for a great learning aide. By going thru them, you probably won't find high grade, MS coins, but you will learn a lot about the series (key dates, strike issues for years, etc). They are also a great source to learn about coins with surface problems before investing in coins with a higher premium.

 

Coin collecting and investing probably should not be in the same sentence.

 

Ok, selling my jusk silver to buy rounds and bars is out of the question. What Doug and Pat said makes sense about keeping a pile of silver coins around is always a good idea and goes right along with collecting high quality coins, however I don't understand why coin collecting can't be seen as an investment? It seems about 1/2 the people on the internet say it's a just fine way to invest, and the other 1/2 say that coin collecting shouldn't be use in the same sentence as investing. I guess I just need someone to explain their stance and why they think what they think in terms of coin collecting as an investment.

 

They can co-exist peacefully. There are hundreds of things to collect -- just pick several that your research suggests will grow in value over the years. That takes more know-how than some of our members have, for the time being; that's why you see them constantly churning their holdings, searching for the magic bullet, and generally disappointed with the result. I see coin categories mentioned that I wouldn't collect in a million years, but I'm not going to call them out, I don't want to start World War III.

The first albums I bought, over 60 years ago, were the two-volume Whitman type set, and the two-volume Lincolns. Have never regretted starting either one. Next were Indianheads and Mercury dimes.

 

Some people do "invest" in coins and make a decent profit. However, this depends on many variables, among them price paid, and demand for that particular coin when it is sold. To some extent luck also plays a role. Most sucessful "investors" are strong on knowledge and know the market because they are involved deeply. On the other hand, some coins loose value with time and you should be able to face that possibility. The safest stategy is to buy what appeals to you and try to get the best possible price. But be prepared to face the possibility that down the road your coin might be worth less than you paid for it. Oh yes, and keep good records.

 

Some folks collect as a hobby and some are more 'serious' about it(if you will). It's the old phrase 'opinions are like...' and go from there. I personally collect for both. I've collected larger quantities of 'lesser' coins over the years. Most here will tell you to go for more 'quality'. Fact is you can do both. That's what makes the hobby great is that YOU determine what's what based on what you can afford and what you like. My further personal stance is that if you're like me and not floating in large pools of cash reserves, you can spread out the value over quantities (that's a whole nuther topic in and of itself) as opposed to tying up your cash in lesser quantities of more 'valuable' coins. Bottom line is that it's for you to determine and don't listen to anyone too exclusively because opinions ARE like...you know.

 

My advice would be to do your homework before investing any money in silver and coins. I enjoy both and feel somewhat comfortable with silver after tracking it for a year. I seem to learn more about it each day from this site. Find out where you can get the best prices for buying and selling both online and face to face with a dealer at their shop or at a coin show. As far as coin collecting goes the overwhelming opinion on this site is not to expect to make a profit on your collection but enjoy it as a hobby. I have not spent a lot of money on coins because I have only been collecting for a year. I am still a noob.

 

With numismatic coins you will rarely get back the premiums you pay.

Even with bullion and junk silver There has to be significant uptick in PM prices to make a profit...and prices often go down....for years at a time.

Study some PM price charts over 1, 5, and 10 year periods.

 

Even poor high-risk investments are technically investments. People open restaurants despite the fact that 60% fail in the first 3 years. People invest in cars so they can get to work.

However, I think "coins aren't an investment" is a bit of a blanket statement in this forum (like, "don't clean your coins") since once a week somebody comes around thinking they will be the next Warren Buffet buying and selling precious metals or numismatic items. Technically, it is an investment. However, very few people have the knowledge base to buy smart, much less sell at a profit.

If you want good examples of why folks say not to view coins as an investment look at the Collectible Sports Cards from the late 70s-90s or Hummel figurines. At any point for many obscure reasons without warning items can lose favor with collectors.

 

This is true with most anything but especially with bullion or bullion masquerading as 'collectibles'. I'd recommend anyone new avoid the various collector bullion rounds. If you like them then sure collect what you like, but don't expect to make money or think they are investments. There are going to be lots of people ticked even if silver reaches 40/oz when they can't sell their 'insert artsy silver round here' for 3x what they paid. And instead get offered spot or a few dollars over which is less than these rounds costs to buy when they sell.

In general numismatic coins hold their value much better and are less subject to swings in pm prices and are thus a much more stable play imo. I've always made out better with numismatic plays versus bullion ones. Despite starting out having a main focus on bullion I quickly moved into numismatic coins and have done much better there. Certain numismatic coins are also extremely liquid if you stick with key dates, etc you'll have no issue finding a buyer when necessary.

 

I like 90% silver and common pre 33 US gold. I think it is a better play than bullion.

 

Well thanks for all the feedback guys. I'll go figure out how exactly to track silver, and I'll do a bit more research coin collecting in general. Hope y'all have a good day and happy Valentine's Day.

 

Here's a website (for all PM's) that's easier to use than Kitco:
http://goldprice.org

 

I buy low mintage collectable coins (not private mint) at as close to bullion value as possible, it's worked out well for me.

 

I've fooled with coins in one way or another since I was in junior high back in the early 1950s. Although I've never tried specifically to invest in coins, I've done a lot of buying and selling and have nearly always made money on what I sold. My advice in terms of investment would be as follows:

1. Buy over a long period of time.
2. Buy key coins and gold, as the demand will almost always be there.
3. If you don't know what key coins are, you need to do a lot of learning before beginning to buy coins.
4. Stay away from modern mint products.
5. Corollary to that: Buy pre1935 coins.
6. Be sure you pay a price commensurate with the coin's condition.
7. Stick with coins certified by the major services (ANACS, NGC, PCGS).
8. Don't buy problem coins no matter how cheap they seem to be.

 

My collecting coins began in the early 1960's. Collectible and scarce coins still circulated enough in public to assemble a diverse collection. If starting today, knowing what I know now. 1. Add coins because you like them. 2. add the coin with the most eye appeal that falls within budget at the time (Buy the coin-Never Buy the Grade) Enjoy whatever you decide to collect.

 

Hi mellow,

You've received some great advice. All I would add is that you should collect what you like. Is coin collecting a form of investing? It can be if you're willing to invest the time and effort. It's not unlike making money in the stock market. Sure you can make money but you have to do your homework and it's not easy.

Try not to sell in order to buy. The vigorish will kill you. With stocks, it might cost you $7. With selling a coin, you're being paid wholesale and having to turn around and pay retail. The vig is ~20% or so. Ouch!

But as I said, what it most important is for you to go after something you like and are interested in. That way it's easy to study and learn about it. Cripes, I stack odds and sods bullion, ASE's AGE's, silver crowns (old and new), etc. You could call that hoarding. I also have a nice set of cents and nickels with the keys slabbed. For example, I've always liked the V nickels. They are not a market darling but feh. I like them and have completed them AU grade. Same with the indian cents. You can call this collecting. Hoarding bullion vs. collecting coins. They are not the same by a long shot BUT they can overlap. You're the one that decides and you're the only one that needs to be happy.

and so it goes,

peace,

rono

 

Hang onto your Junk 90% Silver. It has better premiums than Silver Rounds! Stack your 90% baby, stack it!