Sunday, March 2, 2014

Silver was Down More than 30 Percent in 2013, but am I Worried? Heck, no!

2013 was a tough year for silver.  Some might even call it a disastrous year. 

I’ve liked silver as a form of investment since I got my first Silver Eagle coin as a child.  I look at it as the “poor man’s gold”, since it’s much more affordable than its golden-boy brother.  However, I like silver in its physical form, not paper.  This is why the plummeting of silver’s price from over $30 an ounce at the beginning of 2013, to under $20 an ounce by year’s end, didn’t particularly bother me.

Buying the ‘right’ silver
Don’t get me wrong, I don’t have treasure chests of silver just lying around or anything like that, but when I have a little extra money at the end of the month (which isn’t often these days), I might pick up a few ounces at our local coin shop. 

But I don’t buy just any kind of silver; I tend to buy pre-1965, 90 percent silver dimes, quarters, and 50 cent pieces.  I’ve found that there tends to be more collector interest in such coins, which means a greater numismatic (collector) value.  This also provides a greater chance to discover mint flaws that can push the value of the coin even higher.

Understanding silver
More than gold, silver has many industrial and medical-related uses. 

According to geology.com, “Because it is the best thermal and electrical conductor of all the metals, silver is ideal for electrical applications. It's antimicrobial, non-toxic qualities make it useful in medicine and consumer products. Its high luster and reflectivity make it perfect for jewelry, silverware, and mirrors.”

The site goes on to say, “Its malleability, which allows it to be flattened into sheets, and ductility, which allows it to be drawn into thin, flexible wire, make it the best choice for numerous industrial applications. Meanwhile, its photosensitivity has given it a place in film photography.”

This means that even if investor value is tanking, demand may be propped up by industrial consumption, which can play a crucial role in silver recovering some of its lost value.

Knowing resale options
It’s not hard to resell silver coins.  If you don’t believe me, just take a minute to search “US silver coins” on eBay, and see how many thousands of listings are available.  Such research not only provides information on how to list such items (descriptive terminology, pricing, etc.) but can provide valuations on what certain coins are selling for dependant upon year, condition, mint location, flaws, and more.

Understanding where and how to resell such coins, whether it’s online or at the local coin or pawn shop, as well as what the costs involved are (commission, taxes, listing fees, etc.), makes it easier to sell if or when I want to and get the best price for my coins in the process.



Disclaimer:

The author is not a licensed financial professional or precious metals expert.  This article is for informational purposes only and does not constitute advice of any kind.  Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.

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