In an age where digital transactions and cryptocurrencies are the norms, the concept of precious metals as a form of money seems outdated to many.
However, there’s a compelling case to be made for considering silver as an investment, not just as a relic of the past, but also as a relevant and wise choice today for those looking for long-term wealth preservation and financial security.
Silver has long been considered a form of money. Up until 1964 in the United States, most of the everyday coinage was minted from silver.
This historical significance isn’t just a matter of antiquity; it’s a testament to the intrinsic value these metals continue to hold across various cultures and economic conditions.
Getting started with physical precious metals can be an exciting venture. Understanding the basics of silver investing, including the different forms that silver comes in and their respective attributes, is key to making informed decisions. Shopping around ensures the cheapest silver prices and getting the best deal available.
Silver Coins
Coins are issued by government mints and have a face value, making them legal tender. Though the intrinsic value of the metal usually far exceeds any nominal fiat value.
Silver coins provide legal tender status, trustworthiness, and have the potential for numismatic appreciation. Coins such as the American Silver Eagle, Canadian Maple Leaf, and other government-issues are minted with .999 fine silver or greater. Being government-backed provides a higher trust factor.
Some silver coins also have numismatic value, especially limited editions, proof issues or older, rare coins. Even some modern 1 oz silver coins carry a higher premium over the spot price than rounds.
Silver Rounds
Rounds are circular pieces of silver, similar in appearance to coins, featuring a wide variety of designs, but they are not legal tender. Rounds are produced by private mints and have a high level of purity, most often .999 fine silver.
Generally, rounds have a lower premium over the spot price of silver compared to legal tender coins, making them a cost-effective way to accumulate silver. They are available in various sizes, such as 1 oz, 5 oz and 10 oz denominations. The lower-cost provides a way to accumulate pure silver at a lower premium.
Starting small and gradually increasing your holdings while diversifying across different types of silver can be a prudent approach to building your precious metals portfolio.
Silver Bars
These are the most common and vary in size from 1 ounce to several kilos. They are valued primarily for their silver content. Most silver bars are .999 fine silver and their purity is stamped on the bar.
Sometimes, bars are minted with unique designs or limited editions, adding collectible value. Larger bars (e.g., 10 oz, kilo bars) offer a lower premium per ounce but require slightly more storage space.
Starting Your Silver Collection
Determine your budget and investment goals. Are you more interested in wealth preservation, potential capital gains, or collecting?
Consider diversifying your silver holdings across coins, rounds, and bars.
Silver products are sold at a slight premium over the spot price of silver. This premium varies depending on the dealer, and shopping around can lead to finding lower premium options, which is crucial for cost-effective investing.
Silver prices can vary significantly between dealers due to differences in overhead costs, inventory levels, and dealer margins. Different dealers often have special offers or bulk discounts. By comparing prices, investors can take advantage of these deals.
Shopping around and comparing prices can provide investors with a better understanding of the current market conditions and typical pricing structures.
Some dealers might price certain items higher due to their collectible value or perceived rarity. Savvy shopping helps investors avoid overpaying for such items if their goal is purely investment-focused.
Buy from reputable dealers to ensure authenticity. This includes well-known online dealers, local coin shops, or authorized distributors.
Keep track of silver market trends and prices to buy wisely.