What are the disadvantages of investing in or owning silver coins? This is probably the second question the potential silver investor will ask after reading or hearing that silver coins, not colorized or plated, are among the most popular forms of physical silver to invest in or to own. In fact, Silver Bullion is of the opinion that silver coins, especially silver bullion coins, provide silver investors with the best means of investing in or owning silver, physical silver that is.

There are not many disadvantages to investing in or owning silver coins (as described on the Silver Bullion website). In fact, we at Silver Bullion can only come up with a couple of disadvantages and even then it’s nothing to write home about. The first disadvantage is the fact that the high net worth investor might find silver coins, especially ‘junk silver’ coins, not compact enough in terms of the silver content to buy or acquire vast quantities of silver coins within a short space of time. E.g. we know of at least one official silver dealer/seller that restricts or limits orders of American Silver Eagles to five coins per household and cost-effective ‘junk silver’ coins normally only sell in bags that are difficult to get across the borders of most countries, including South Africa. Depending on your location, this will make it difficult at best to quickly and effectively build up a substantial stash of silver coins (or physical silver for that matter!). It is much quicker and more effective to build up a stash of silver bullion bars (silver bars) if you’re a high net worth investor wishing to invest in or own silver, physical silver that is. Yes, it’s perfectly fine and highly recommended, despite the level of your net worth (perceived or real), to invest in or own at least a 100 troy ounces of silver in the form of silver coins, especially in the form of 1 oz silver bullion coins in the traditional or conventional sense.

In addition to the above, another disadvantage of investing in or owning silver coins, is the fact that silver coins, especially silver bullion coins in the traditional or conventional sense, can sell at substantial percentages or premiums above the melt value of the silver contained in the relevant silver coins. This is not a major disadvantage, especially if one considers that in countries such as South Africa, silver bullion bars (silver bars) with no or very little collector’s value (numismatic value) tend to sell at much higher premiums than silver bullion coins ordered from overseas (at the time this was written). To pay a premium for collector’s value (numismatic value) is not a bad thing as such, especially if the silver investor considers the “double play” in terms of the investment prospects. The secret to successful silver investing or silver ownership in this regard is to never overpay for collector’s value (numismatic value). When the silver investor buys initially, it’s important that the collector’s value (numismatic value) doesn’t outstrip the melt value of the silver contained in a relevant silver coin(s). To avoid any possible confusion, assuming that the melt value of the silver in a coin is $30, you don’t want to pay more than $60 for the relevant coin since then the perceived collector’s value (numismatic value) will certainly outstrip the melt value of the silver. Yes, later when he/she finds a willing buyer, it will be perfectly fine to sell even if the collector’s value (numismatic value) outstrips the silver melt value by a million times or more, but when you buy or acquire a silver coin(s) initially, the smart thing to do is to not overpay for collector’s value (numismatic value).

 

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