Investing in silver and gold coins is part practical art, part economic science. But as with any investing, it is very important to have clear-cut goals in mind when you invest.
Many investors are using gold coins or silver coins as an investment because they want to make a quick profit. But this is not the best method of investing in metals. The best reason to invest in precious metals is to preserve wealth. In tough economic times, high net worth individuals invest in gold and silver to preserve the existing wealth they have and guard against the effects of inflation.
The reason they do this is that inflation erodes the value of the dollar and without gold and silver to stave off this erosion, the value of any investment portfolio measured in dollars is diminished.
During tough economic times, gold and silver traditionally have held their value and it is for this reason that gold and silver have traditionally acted as a hedge (or a guard) against inflation.
While all investments carry some degree of risk, the risk associated with gold and silver coins is extremely high. During periods of economic uncertainty precious metals generally swing wildly in value. Most investors will include some precious metals in their portfolio. But any amount of this volatile commodity has risk. Each investment in precious metals should be considered with a great deal of care and after consulting with their financial investment professional
For those willing to test the waters, the favorites among gold coins, are the American Eagle, the South African Krugerrand and the Gold 50 Peso from Mexico. Each of these is 90% gold by weight and is an effective investment to hedge against inflation.
One other gold coin that remains popular is the Gold Canadian Maple leaf. This coin is refined to a purity of .999 or .9999 percent purity. Almost completely pure, it is one of the few pure investment bullion coins. It is also considered a very reliable form of investment bullion.
Silver is a more affordable hedge against inflation and offers similar benefits as gold. Among silver coins, the US Silver Eagle is considered the premier silver investment. The Silver Eagle has been produced since 1983 and carries a hefty premium during the purchase.
Additionally for silver investors US minted coins prior to 1965 also known as junk silver represents a great investment opportunity. Usually these coins can be obtained for less than the “spot price” of silver on any given day. This reduced premium this represents a very valuable savings in your investment. Junk silver includes Morgan Silver dollars, Peace Dollars, quarters and dimes, all minted before 1965 in the United States. These coins contained 90% silver and are available from dealers and banks nationwide although hoarding and collecting has reduced the availability of these coins.
If your goal is to hedge against inflation, silver and gold may be a great idea. If your idea is to make a quick profit and make money overnight, try day trading, it might be a better bet.