Disadvantages of investing in or owning silver jewelry
What are the disadvantages of investing in or owning silver jewelry? This is probably the second question the potential silver investor will ask after reading or hearing that silver jewelry is among the least popular forms of physical silver to invest in or to own as far as the serious silver investor is concerned.
Silver Bullion is of the opinion that investing in or owning silver jewelry has the following disadvantages attached to it:
Divisibility: Silver jewelry, unlike silver coins which are standardized measures of silver purity and weight, are not easily divisible between the beneficiaries of an estate if you want to do it fairly and equally, especially considering silver jewelry of great sentimental value such as family heirlooms.
In addition to the above, you don’t want to sit with a situation where you have to sell the silver jewelry in an estate or exchange it for non-redeemable paper notes (fiat currency) in order to divide it equally between beneficiaries. It is much easier and more cost-effective to buy silver that is divisible from the beginning, and then we’re not referring to paper silver, we’re rather referring to physical silver, especially in the form of 1 oz silver bullion coins (American Silver Eagles, Canadian Silver Maple Leafs, Mexican Silver Libertads, Chinese Silver Pandas, Australian Silver Kookaburras, Australian Silver Kangaroos, British Silver Britannia and Austrian Silver Vienna Philharmonics).
The silver investor simply doesn’t want to force the beneficiaries of his/her estate into a situation where they have to cut silver jewelry in half or are being forced to sell it in order to divide the fiat currency proceeds between them, especially during times of rampant silver market manipulation and while the “paper gimmick” is still pretty much at the order of the day.
Buying: Silver jewelry can sell at substantial percentages or premiums above the melt value of the silver contained in the relevant silver jewelry. This can be a problem, because the serious silver investor doesn’t want to overpay for silver.
Given the above, it is wise to shop around for the best deals when it comes to acquiring or buying silver jewelry for investment purposes. Many silver investors prefer to buy second hand or damaged silver jewelry at prices below or on par with the melt value of the silver contained in the silver jewelry. Others prefer to buy new silver jewelry, especially limited edition and designer silver jewelry, at higher prices in order to go for a “double play” in terms of the investment prospects.
Selling: Complications might arise the day the silver investor wants to sell his/her silver jewelry. Some silver dealers or even private buyers won’t buy silver jewelry without a jewelry appraisal done by a professional or certified jewelry appraiser, especially when a substantial amount of money is involved.
Now of course there are many non-silver investors out there who will acquire or buy silver jewelry with little if any forethought given to the actual value of the silver jewelry (in terms of the melt value of the silver and any possible collector’s value).