Invest in silver bullion coins, not collectable coins

When it comes to silver coin investment, Americans are big on the precious metal. There is a lot of creativity and artistry that goes into some of the world’s most sought after silver coins. Coin collectors will pay a lot of money for rare silver coins. Here are some silver coins that have been sold over the years at ridiculous:

  • 1884 Proof Trade Dollar

The U.S government Mint started minting silver trade coins between 1873 and 1885. These were not initially meant for circulation but they played an important role in trading with China. These ceased being used in commerce in 1878 when the Morgan silver dollar was introduced. Mint records show that only ten proof trade dollars were produced in 1884 make them second lowest mintage of trade dollars. In 1885, just five trade dollars were created which makes them very rare. In November 2004, David Lawrence auctioned one of these coins for $1,006,250. Coin collectors only discovered these rare coins more than 25 years after they were first minted.

  • 1794 Flowing Hair Silver Dollar

The silver Flowing Hair Dollar made in 1794 is probably the second most popular and the rarest silver coin in the world. The coin is valued at over $5 million. These were the first silver coins minted by the U.S government mint. The craftsmanship is not as polished. First of all they were big and presses couldn’t produce enough pressure to strike the silver, so these coined ended up being hand-made. The mint managed to make 1,758 silver dollars which was a great achievement, a 1794 Flowing Hair Silver Dollar sold for over $10 million at The American Auction.

These are just two of the most ridiculously priced coins that have been auctioned in recent times. With prices like this, most people wonder what is worth it: Numismatics or bullion coins. To answer the question you have to be clear on why you are buying gold coins.

Why you should buy silver bullion coins instead of ‘other’ silver coins

The price of numismatics is driven by intangible factors like age, design and year of issue, not so much the gold content. For a lot of precious metal investors, everything is clear: you should buy silver bullion if your goal is to build and protect your worth and not the purity or the silver content in a coin. You should not invest in numismatic silver coins unless you understand the complexities of the metal.

Silver bullion coins are simpler. Investing in them is less complex and the process not nearly as convoluted as other silver coins. There is a clear value proposition in silver bullion coins that is just not there in numismatics. It is easier to liquidate silver bullion coins because much is known about the coins themselves and their value is not tied to some ephemeral factors and sentiment that only a few people in the world share.

Bullion coins offer a long term store of value that is based on the precious metal content. It is much easier to find a precious metals dealer when you have silver bullion coins to sell than when you have old silver coins and grading these can be a nightmare as collectors will grade the coins differently. The Silver Bullion market is more transparent as the spot prices and premiums are posted on a daily basis for everyone to see. On the other hand, numismatic silver coin pricing is derived from attributes that are more complex than just the basic content of silver in the coin. Essentially, numismatic silver coins are worth whatever anyone is willing to pay having weighted all those subjective attributes like design and rarity. If liquidity is important for you, silver bullion coins are the best silver coins to buy.

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