Silver: Coins Versus Bullion

May 7th 2016

Silver is considered one of the safest investments that a person can make. It has retained its value for thousands of years, and there is no logical reason that its popularity will ever drop. Aside from silver's obvious value in terms of jewelry, it is also used in computer circuit boards, cell phones and other electronic devices. The amount of silver used in each individual device is minute, and since these items are rarely recycled, a percentage of silver resources is lost each year. Luke Burgess of Investment U says that "...unlike gold, silver is typically used only once, and then thrown out." 

What this means for investors is that the silver market is only set to get bigger. Whether you decide on silver coins or silver bars, however, is an issue that is not so cut and dry. The first thing that would-be silver investors need to know is to steer clear of televised, highly advertised silver coins. Why? These are priced to cost more than the actual value of the silver, simply because of the collectable designs, limited editions and the cost of advertising. When it comes time to sell, limited-edition coin owners will usually only be able to get the price of the silver, with no added value from the coins' mint. Unless the coins are going to be collected and eventually sold generations after the purchase, they will nearly always result in a loss. 

Investing in Silver Coins 

It is possible to get your money's worth from silver coins, but you need to be picky about those you choose to buy. If you want to buy silver coins because of the added value of having a rare collection, then you need to be absolutely sure of the value of the coins and the likelihood that they will increase in value over time. Rare silver coins, such as the Texas Commemorative Half Dollar, Barber Half Dollars and many of the early Morgan or Peace Silver Dollars are definitely worth your money. These are, however, difficult to track down and quite expensive to acquire. 

Investing in Silver Bullion 

If you don't want to trade in rare coins, the best way to invest in physical silver is by purchasing weighted bars. Anthony Gucciardi of Story Leak insists that silver bullion investors make their purchases based only on the quality of the metal. He says, "What you’re shooting for is pure silver, .999 fine silver." Silver bars are pressed by many different mints, but the most reputable of these include JM Bullion LLC and Provident Metals. Avoid eBay sellers, local dealers and online bullion dealers unless you have trustworthy references that support them. If the .999 purity marking on the bars is falsified or you accidentally buy lower-grade silver, you won't be able to get your money back.

Although silver bars from different mints will generally have slight differences in shape, they should all have a purity of .999 and a specific weight of somewhere between one and 10 ounces. Bars from the same mint are stackable for easier storage. 

More in category

Related Content