In a previous article, we discussed why you should take coin dealer coin recommendations with a grain of salt, as many coin dealers are looking out for their best interest, as opposed to yours. This may involve trying to sell illiquid and/or highly priced numismatic silver coins when there may be better options available to meet your long term needs. One of the options that we highlighted as a solid investment is 90% silver coins. We’ll go into further detail below regarding the types of 90% silver coins available and provide four objective reasons why pre-1965 U.S. silver coins should be represented in any silver coin and bullion portfolio.
Types of 90% Silver Coins
As an introduction, U.S. dimes, quarters and half dollars minted in 1964 and earlier contain 90% silver content. While all of the aforementioned coins contain the same purity of silver, some older, higher end and low mintage coins may sell at an additional premium. These coins are also known as collectible or numismatic coins. For the purposes of our discussion, we’re referring to silver coins that are primarily bought and sold for their silver content. These are common date circulated condition silver coins that are commonly referred to as junk silver coins.
While the current price of 90% silver coins is above the historical average, these coins are still very affordable; especially when compared to some other silver coin and bullion options. When buying 90% silver coins in bulk, premiums can be as low as 10% – 12%. Half dollars typically sell at a higher premium than dimes and quarters, so if you’re looking for the lowest cost 90% silver coins, dimes and quarters may be your best bet. However, because silver half dollars are more popular, you should realize a higher price when the time comes to sell your coins.
Most coin and bullion investors are willing to pay a premium for smaller denomination coins. For example, tenth ounce American gold eagles sell at higher prices than one ounce gold eagles and American silver eagles sell at higher prices than ten ounce and one hundred ounce silver bars. The reason individuals are willing to pay a premium for small denomination coins is because there’s a larger and more liquid market for what are perceived to be affordable silver coins. Among the smallest denomination silver coins are U.S. silver dimes, which contain approximately 1/14th of a troy ounce of silver.
Not only should silver coins and bullion be affordable and in tradable sizes, but it’s also important that the coins, bars and rounds that you purchase are recognizable. This helps to create a broad and liquid market, which is important; especially when or if the time comes to sell your silver coins. Unless the coins in your possession are government minted or produced by a well known and reputable private mint, you may find that you have limited options when the time comes to sell your coins.
While the likelihood of a complete currency collapse is a bit remote, in the unlikely event that it occurs, we may revert to a barter system; at least for a short period of time. Survivalists and hard money advocates are of the opinion that 90% silver coins may be used for bartering, as they’re considered “real money.” In other words, gold and silver coins have intrinsic value as opposed to recently minted U.S. coins, which are composed of nickel, copper and zinc. Some individuals also hoard pennies minted in 1981 and earlier, as they’re composed of 95% copper. Current pennies are composed of zinc with a copper flashing.
In summary, we’ve identified some of the types of 90% U.S. silver coins available and have provided four distinct reasons why 90% silver coins should be included in silver coin and bullion portfolios. They’re generally affordable coins, as they’re primarily bought and sold for their silver content, they’re available in relatively small denominations, which helps to make them liquid, they’re among the most recognized silver coins investments available, and in the unlikely event we ever experienced a complete currency collapse, they may be used for bartering.