should I invest in bullion or graded "collectors" coins?

W

wnt

New Member
Hi everyone,

I've been wanting to invest in silver for quite some time, but really did not know where to start. My goal is long term investment.

In the realm of previous metals, I am a complete noob, so I apologize in advance for any obvious or simple questions I'm about to ask.

I'm having a hard time understanding how investing in silver bullion works. From the get-go, it seems like you are already loosing money in your investment. By this, I mean the premium one has to pay to buy x amount of silver rounds or x amount of Silver Eagles. I guess what I'm trying to ask is: how does one make a profit when you have to pay these premiums? Is it expected that, long term, the price of silver will simply rise past these premiums, thus allowing you to make profit?

From what I've gathered, it doesn't seem to make sense to buy (for example) one or two silver Eagles a month, as you are loosing a lot in the premium...it's more economical to buy in larger quantities. If this is correct, what is a descent amount of rounds/Silver Eagles people tend to buy at once to off-set the premium?

Secondly, I've noticed that there is quite a market for graded Silver Eagle coins. Since there is a "collectors" aspect to these coins, their price is no longer only tied to Silver spot price, but to their availability and age...is this all correct? If so, would this be a more sound investment?

I apologize if some of my questions are hard to answer. It's hard to consolidate all that I've read online, and I'm hoping you guys could give me a few pointers on how/where to start.

Thanks very much!
 
If your new I say get your silver close to spot. So low premium bars and rounds. Once you get the feel and understand precious metals a more you can buy higher premium stuff that you want to collect.
 
Agree with Salvaja 100%. I would get coins with collector’s value as close to spot as possible. An example may be the kook or the koala at times the lunars from the Perth mint. Again, you don’t want to pay a ton over premium...but those types have lower mintage and design changes every year and they’re recognized around the world...maybe a little increase in premium is warranted if you want to increase your risk by buying Swans or Birds of Paradise or EMU’s, etc...but you have to be an early buyer...because when they come out, many times they start at say $22.00 (a bit more than kooks, and even more premium over eagles), BUT, take a look at how much the 1st EMU is going for or the 1st Swan is going for etc...
 
You can do both.

Generally buying in bulk is going to get you a better deal on premiums and also if you are paying postage it is usually cheaper to pay for a large heavy item rather than postage on a lot of smaller but still heavy items.

Generally if you can identify items from years ago that are currently still getting high returns (Such as graded Eagles) then you are on to a winner. Many silver coins are now worth less than their issue price and have a very limited market. This will probably be true for future releases as well. Hype is a big part of the premium and when the hype dies down the premiums do too.

Silver was pretty much just a hedge against inflation. Money loses its purchasing power because of inflation, so the longer you hold it the less you can buy with it. The idea is that you buy silver now, and in 10 years time when you need the money you sell the silver at the inflated price and basically you can buy the same items you could have bought 10 years ago. So not a great investment as it doesn't really go up in value unless a new use is found for it.

The collectible market is where you can make and lose money on silver items but you really need to be lucky, or really throw some time and effort into researching what topics are popular, what is hard to get hold of etc. Same as with any hobby or investment. It takes a lot of effort. Which if it is your hobby is perfect, otherwise it is like having an extra job.

I think you will make the most money on buying the items rather than selling them, if you pay full price for an item then you are going to struggle to make a profit. If you can get the item cheaper then you will make more money when you go to sell it. So buying in bulk, liquidation sales, people desperate to sell for medical bills etc.
 
Your idea about making money is correct, wait until the price goes up then sell it. When dealing with bullion you are going to have to find a balance between low premium and the ability to sell the items later. For the most amount of metal for your money you need to save up and buy 1000oz bars. However when the time comes to sell them there is not much market for something that big. On the other hand you could buy 1/10 oz silver coins, you would get a lot less than 1000ozs due to premium costs. They are easy to sell because each one does not cost much so you can easily find buyers. Also the coins tend to be trusted more than the bars due to fakes being easier to spot. My own personal suggestion is to stick with bullion and not go into graded coins until you have been collecting and reading for a while. Stick with 1oz coins, rounds and bars to begin with as they seem to be the most liquid and a good balance between premium and ease of sale. Buy a few different types and mix it up a bit until you find something you like. As long as you stay close to spot price and do not buy fakes (use a reputable dealer) it is difficult to go wrong.
You will not make a fortune with silver but you will not lose one either.
 
This:
“Generally if you can identify items from years ago that are currently still getting high returns (Such as graded Eagles) then you are on to a winner. Many silver coins are now worth less than their issue price and have a very limited market. This will probably be true for future releases as well. Hype is a big part of the premium and when the hype dies down the premiums do too.”

I believe all the stuff from the Poland mint will come back to earth, and it will be a painful lesson IF they bought as an investment. But if they love the art work, then who cares. When you die give to your kids, maybe they’ll appreciate the art too?

This too:
“The collectible market is where you can make and lose money on silver items but you really need to be lucky, or really throw some time and effort into researching what topics are popular, what is hard to get hold of etc. Same as with any hobby or investment. It takes a lot of effort. Which if it is your hobby is perfect, otherwise it is like having an extra job.”

A lot of luck!! Others all of us would have been early adopters of the Ares god of War - our the door at 220.00 and now fetching nearly 2k! Big time bubble. Be careful out there.

Not this:
“You will not make a fortune with silver but you will not lose one either.“ ask the people who spent a fortune buying silver from 49 down to 14.00. I k ow lots of people who lost a fortune!!
 
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As a long term Stacker I would strongly recommend bullion. Ignore premium as it is only profitable as a business.

Just to clarify, a premium coin usually provides a profit on a single sale. You would need to devote a full time week to receive a full time wage. As an example if one sale returned $25, and at best it only took an hour, you would need 40 hours a week to make $1,000.

However with bullion, it is bought and sold in both small and large amounts for roughly the same cost, barring shipping. It is therefore easily sourced and easily sold with a minimum of fuss.

As to breakdown, I would hold 30 single ounces, 3 ten ounce bars, and one kilo bar; in increasing multiples.

Finally, the secret to stacking is stacking, not investing. Stacking allows you to forego life's trivial expenses with that money going towards silver. You'll be surprised at what you are prepared to let go just to accumulate silver. You'll find that within a short time the value of your silver will exceed whatever amount that you budgeted for. My initial stack of a few hundred ounces came from selling anything that was not nailed down around the house on eBay and buying coins on eBay with the proceeds.
 
I don't mess with neumismatics too much. I don't understand it. I understand why my bullion is worth what it is. I mean I do collect things like Pandas, Kooks, Koalas. But that's more because I enjoy them than because of any possible neumismatic value they might gain over time.

The only "collectable" coin I have right now is a Barber dime. I wanted a Barber that would could see the detail on, so I got the cheapest one I could find that I was also satisfied with how much of the detail was still left. I don't expect it to ever be worth more than the $30 I paid for it.
 
Good thread all and good comments by all.

If stacking silver (and some gold subject to the depth of your pockets) is part of an investment diversification strategy (ie cash, property, shares etc) then one should also hold a diversified / varied holding of silver be it kg / half kg bars, varied ounce bars, rounds, govt issued coins and and some fun/interesting stuff which you will start to like and buy once you get into stacking.

Welcome to the slippery slope of stacking. Enjoy.
 
then you should enjoy this slope too. :p

2019 1 OZ FIJI COCA-COLA POLAR BEAR .999 SILVER ULTRA HIGH RELIEF PROOF COIN
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Hi everyone, I wanted to thank you all for your wonderful input and advice. It's definitely pointing me in the right direction in terms of where to go next. It seems like the general consensus is to not risk buying "collectibles" and invest in bullion instead. Thank you again for all of your advice, I look forward to posting on here again in the future!
 
One other thing I will add. If you are swayed by collectibles, buy just one. Savour it for a time, then sell it and use the proceeds for your next collectible. This way you are not over invested in hard to move coins. The rest of your money should still go towards bullion.
 
There are two things with silver (or gold): commodity value and collectible value (numismatic). You have to separate them in your head and decide what goal you want to chase. You should have reasons for each silver purchase: to store wealth and make money... or to buy a collectible (which may or may not make money... need to be comfortable with that).

Commodity value is the silver. That will be your spot price. Bullion is more liquid and more valued than random generic rounds. Bullion is easier to buy and easier to sell... but limited upside due to no real rarity. Silver as a metal is somewhat monetary but much more industrial than gold, which is basically just a monetary metal (typically roughly inverse stock market). When you buy generic silver or bullion, you are betting on spot price. A few bullion might carry slight premiums in hot markets, but never count on that... the higher premiums on bullion are just for higher liquidity.

The collectibles (numismatic coins) are just a glorified guessing game. This is the value from the coin art, year, privy mark, and any number of other nonsense govt and private mints can dream up. These ones will have slight to significant premiums. If the art is liked or it is perceived as rare or whatever... price may go up. Most eventually stabilize to roughly spot. People will say that they can predict it and blah blah, and maybe some can. Most of those saying numi stuff will go up, esp new stuff from the mints, are the ones selling it. Many of the people hyping numi coins here or elsewhere on the net, YouTube, etc get paid (per-click or own websites) to do that or have vested interests. Proceed with caution.

If you want to do collectibles, I don't even see why they have to be silver and gold... why not sports cards or autographs or stamps or paintings or 1st edition books or furniture or movie props or etc? The reason for numi coins is that silver and gold give the collectibles the illusion of credibility and security to the buyer. It is easier to sell a $15 colored picture of Aquaman on a $15 silver coin for $30 total than it is to just sell a $15 or even $10 or $5 little colored picture of Aquaman by itself, you know?

...as far as I'm concerned, bullion is the way to go for most silver stackers who aim to preserve wealth with some long term growth potential (expect it to basically keep up with inflation over years... not on day-to-day basis, though). You know what to expect and what your goal is, and it is quick and easy to find buyer(s) when you want to do so. Gold is even better for that since is is almost purely a monetary metal, but silver is fine also when you are starting out and have enough space for all of the silver.

If you want to speculate and shoot for capital gains with part of your porfolio, you will typically do much better in stocks and any collectibles (metals or otherwise)... esp in the long run. The art value numi silver coins might as well be minted on wood or plastic IMO. The metal content is only a sales tactic and affords them a floor price of spot, instead of zero. I would suggest you buy these coins only if you personally like them... and expect to lose value unless you get very lucky. The precious metal factor is just the commodity value as a sales trick and to be there as your floor price for the coin; that helps the mints sell them, though. To me, that is like buying a race horse that you could always sell for the price of horse meat and glue... might luck out on a star horse, but usually not very wise to spend money that way unless you really love it. People probably wouldn't spend $35 on a Mickey Mouse wooden or plastic coin... but they might on a silver or gold plated one. This is the same reason BitCoin and other crypto are always visually illustrated as gold and shiny or that insert basketball or baseball cards often have shiny gold plating on them.

The key is just to have goals for each thing you buy. For me...
-Gold bullion= compact wealth store, value growth to offset inflation, can sell it if it spikes during a stock crash or recession
-Silver bullion = liquid wealth store, value growth to offset inflation, could sell in a spike from industry or recession
-Stocks = growth of wealth
-Real Estate funds and dividend stocks = cash flow, bit of growth
-Silver numi = stuff I enjoy having on display and knowingly overpaid for... might sell set(s), statue(s), etc if it rises significantly, but not expecting that. I honestly view them just like my paintings or sports memoribilia sitting on the shelves. They are wild cards that I paid too much for... but I like them
 
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