Over the years, we’ve met with hundreds, if not thousands of silver coin and bullion buyers. We’ve also spoken with and/or have met with hundreds of first time buyers. With respect to first time buyers or individuals new to silver investing, the question inevitably comes up as to which silver coin or bullion option is best. This is a difficult question to answer, as there are a few different approaches to investing in silver. Rather than discussing which approach we believe is the best, we thought that we would identify a few categories under which most of our customers fall. In this article, we’ll discuss five different approaches to investing in silver coins and bullion in hopes that you’ll be able to identify with one of the categories and to be able to focus on the type of coins that best suit your needs and long term goals.
If you’re an individual that only buys “American,” then this approach likely spills over to your silver coin buying as well. While there are a number of U.S. silver coins from which to choose, such as Morgan and Peace dollars, silver commemorative, and proof silver coins, by and large, our patriotic customers are partial to American silver eagles and 90% silver coins. These are the most recognized, traded and liquid silver coins in the United States. If you have no intent of ever relocating elsewhere and only buy red, white and blue, then these are likely the coins for you.
Our premium silver coin and bullion customers tend to prefer sovereign issued silver coins. These are fine or pure silver coins minted by sovereign governments, such as those produced by the United States, Canada, Mexico, China, Austria and Australia, just to name a few. Government issued coins tend to sell at a higher premium than most other silver coins and bullion, as they’re guaranteed to contain the exact silver content and weight as outlined in the coin’s specifications. Furthermore, most government issued silver coins are recognizable, which provides for a broad and liquid market in which to trade these coins. It should be noted that some government issued coins will sell at a higher premium due to their collectible or numismatic value. This applies to years in which lower quantities of coins were produced.
The term “standard” is meant to define the category under which most of our customers fall. These individuals aren’t necessarily looking for higher premium government issued pure silver coins, but on the other hand, aren’t looking for the least expensive silver coin and bullion options either. Rather, their primary goal is to purchase reasonably priced coins and bullion that are recognized and can be sold in the future at some point in time without issue. Coins and bullion that fall under this category include 90% U.S. silver coins and privately minted silver bars and rounds. Some of the higher end silver bars and rounds include those produced by well-known and recognized private mints, such as Engelhard, Johnson Matthey, Pamp Suisse and Credit Suisse. These items tend to sell at a slightly higher price than silver bars and rounds that aren’t stamped with the producer’s name.
Individuals that are discount buyers of silver coins and bullion tend to focus on some of the lower premium items, but are still concerned with purchasing items that are somewhat recognizable in the event they need to liquidate their coins in the future. Some of the coins that fall into the discount category include 40% Kennedy half dollars minted from 1965 – 1970, 35% silver war nickels produced from 1942 – 1945 and 80% Canadian silver coins minted in 1966 and earlier. Sterling silver bars and rounds, such as those produced by the Franklin Mint and Danbury Mint, also fall into this category. All of these items are recognized in the industry as tradable silver coins and bullion, but are less popular and sell at lower rates than some of the previously mentioned offerings. Premiums are typically slightly above the silver content of the items, but if you do some bargain hunting, you might be able to find some of these offerings at melt value.
Deep discount silver coin and bullion buyers want the lowest cost silver, period. They aren’t necessarily concerned with the resale value of the items that they accumulate; they just want to purchase silver in some form or fashion for the melt value of the metal, or less. Surprisingly, some coins can be acquired for melt value or less, but these are typically lower purity foreign coins, such as those that contain a purity of 50% or less. A couple of examples include 50% Canadian silver dimes and quarters produced from 1967 – 1968 and 10% silver Mexican pesos minted from 1957 – 1967. Some individuals will skip coins altogether and will pursue silver bullion in other forms, such as sterling silver jewelry and/or silver flatware and serving ware. Many of these individuals will frequently visit thrift shops or garage sales in search of hidden gems.
In summary, over the years we’ve been able to identify a few different types of silver coin and bullion buyers. What we refer to as our “patriotic” investors are only interested in U.S. minted coins. Premium investors don’t mind paying a higher premium for government issued pure silver coins. Most individuals fall into the category of “standard” investors, which means that they’re looking for reasonably priced recognizable silver coins that can be sold in the future without issue. Discount investors are in search of low premium silver coins and bullion, but not at the expense of sacrificing liquidity. Last, but not least, deep discount silver coin and bullion buyers are solely interested in acquiring silver at the lowest cost possible, which is typically in the form of low purity foreign coins and/or silver jewelry and serving ware. Hopefully this article will help you to identify the type of buyer you are and provide you with some suggestions as to the type of items you should consider acquiring.