Clark Galvan
Silver is a popular investment choice for those looking to diversify their portfolio. As a precious metal, silver is a tangible asset with a low correlation to traditional investments such as stocks and bonds. It has historically served as a hedge against inflation and currency depreciation. When investing in silver coins, there are several options to consider, including bullion coins, numismatic or rare coins, and junk silver coins. Bullion coins are typically made by a government mint and have a high silver content, while numismatic coins are valued for their rarity and historical significance. Junk silver coins refer to pre-1965 coins that contain smaller quantities of silver but are still valued for their metal content. When investing in silver coins, it is important to consider factors such as premiums, holding periods, and storage options. Additionally, investors should be aware of the tax ramifications associated with investing in precious metals.
| Characteristics | Values |
|---|---|
| Reasons to invest in silver | Silver is a tangible asset, a store of value, highly liquid, private and confidential, and can be used as a hedge against inflation. |
| Types of silver coins | Bullion coins, numismatic coins, rounds, semi-numismatic coins, junk silver |
| Best silver coins to buy | Low premium over silver spot price, sovereign bullion coins, common silver bullion (sovereign) coins |
| Where to buy silver coins | Local coin shop, online, local dealer, eBay, coin shows, bank |
What You'll Learn
Silver bullion coins
The most popular sovereign silver coins in the world include the American Silver Eagle, the Canadian Silver Maple Leaf, the Austrian Silver Philharmonic Coin, the Australian Silver Kangaroo Coin, the Silver Britannia Coin, and the Mexican Silver Libertad Coin.
When buying silver bullion coins, it is important to consider the premiums over the silver spot price. The lowest premium coins are generally sovereign bullion coins. The best silver bullion coins to buy are common silver bullion (sovereign) coins as they are pure silver and the most popular, which means you will have high liquidity when it comes time to sell.
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Junk silver coins
The term "junk silver" is a casual term for any silver coin in circulated condition, without numismatic value above the market price of silver. Junk silver is a great buy for several types of investors. If you’re just starting out as an investor, junk silver offers a very affordable starting point. If you already invest in major silver bullion coins, junk silver lets you add bulk amounts of silver at a more affordable price point.
If you opt for buying junk silver, the most popular way is to buy a $1,000 face value bag, which is equivalent to approximately 715 ounces of pure silver. An advantage of buying junk silver coins over government-minted bullion coins is that you’ll generally pay a smaller premium per ounce. This means that buying junk silver coins is the cheapest way to buy high-quality government-issued silver coins.
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Numismatic coins
The advantages of owning numismatic coins include the psychological benefit of having a tangible asset that can be held in your hand, as well as the potential for greater returns if the coins are purchased at the right time and price.
However, there are also several disadvantages to investing in numismatic coins. The fees to buy and sell are typically higher than for financial assets like stocks, and there may be additional fees for secure storage and insurance. The bid/ask spreads can be wide, and it can be difficult to sell valuable specimens at a fair price. Additionally, there is a risk of theft if secure storage is not used. Numismatic coins also require knowledge of the coin market to buy and sell effectively.
When purchasing numismatic coins, it is important to buy from a reputable dealer, understand all the associated costs upfront, and be aware of the dealer's buyback policy.
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Silver mining stocks
Some of the largest and most popular silver mining stocks include:
- Fresnillo PLC (FNLPF)
- Coeur Mining Inc. (CDE)
- Hecla Mining Co. (HL)
- First Majestic Silver (AG)
- Pan American Silver (PAAS)
- Wheaton Precious Metals (WPM)
Wheaton Precious Metals is a precious metals streaming company, which means it provides cash to mining companies to cover mine development costs in exchange for the right to buy some of the metal produced at fixed prices. This business model enables Wheaton to profit from rising silver prices while assuming fewer risks and potential cost overruns associated with physical mining.
Other silver mining stocks include:
- SilverCrest Metals (SIL)
- Gatos Silver (GATO)
- Dolly Varden Silver (DV)
- Silver Elephant Mining (ELEF)
- Silver Tiger Metals (SLVR)
- Silver Storm Mining (SVRS)
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Silver ETFs
- IShares Silver Trust (SLV)
- Abrdn Physical Silver Shares ETF (SIVR)
- Invesco DB Silver Fund (DBS)
- Sprott Physical Silver Trust (PSLV)
- Global X Silver Miners ETF (SIL)
- Amplify Junior Silver Miners ETF (SILJ)
- ProShares Ultra Silver (AGQ)
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Frequently asked questions
Silver coins are a tangible asset that can be held in your hand and have served as money for thousands of years. They are highly liquid and can be sold virtually anywhere in the world. They are also private and confidential, and cannot be hacked or erased.
There are five basic categories of silver coins: bullion coins, rounds, numismatic coins, semi-numismatic coins, and junk silver. Bullion coins are made almost exclusively from silver and are considered investment-grade silver. Rounds are produced by a private mint and are usually of good quality, but they don't have a face value or government backing. Numismatic coins are rare coins bought and sold by collectors, and their value is based on their rarity, condition, and demand. Semi-numismatic coins are made to be collector coins but don't yet have historical significance. Junk silver refers to old quarters, dimes, and half dollars that are made of 90% silver.
The best silver coins to buy are common silver bullion (sovereign) coins, such as the American Silver Eagle, Canadian Silver Maple Leaf, Austrian Silver Philharmonic Coin, and Australian Silver Kangaroo Coin. These coins are pure silver, have low premiums, and are easily recognizable and liquid worldwide.
You can buy silver coins at a local coin shop or online. Online dealers often offer better pricing and a wider selection than brick-and-mortar stores, but it's a good idea to check with a local dealer as well to establish a relationship and for quick sales.
