Silver comes in many forms, and is a great physical asset to hold long-term in a portfolio. A1 Coin, Bullion & Estate carries a variety of these different forms of silver:
- 40% Kennedy Half Dollars (1965-1969)
- 90% “Constitutional coins produced by the U.S. government (1964 and prior) in the 50¢, 25¢, and 10¢ denominations
- 35% War Nickels (1942-1945 distinguished with a mint mark above the Monticello on the reverse)
- 1oz generic rounds
- 10oz premium bars
When buying silver, you should establish a good working relationship with a reputable dealer who can help you make the best possible investment. We have pulled together 9 tips to help you identify a good investment and avoid fraudulent sales:
- Think long-term
- Plan for bartering
- Watch for counterfeits
- Save receipts
- Avoid credit card interest
- Avoid unknown dealers
- Stay away from marketing gimmicks
- Avoid large online retailers
- Don’t pay for storage
Tip #1: Think long-term
People often complain when metal prices drop, and stop investing. Don’t do this! If you invest when prices are low, you lower your overall cost average, and you lower your overall investment price per unit.
Look at 401k investments: when the market dips 20%, do you stop putting money into your 401k account, or do you continue to purchase assets for your 401k? 90% of people continue to dump money into their retirement regardless of market conditions; the same should occur with silver. Silver should be a long-term investment, not a short-term investment.
Tip #2: Plan for bartering
Smaller fractional types of .999 silver are best for bartering. If you run out of gas, you would rather barter with ½ oz of silver than overpaying with a full ounce.
Not many people in the U.S. barter with metals, but it is more common to do so in South American countries. Remember: 1/10th oz of gold or silver is much easier to sell than a 10oz bar of silver or a 5oz bar of gold. Smaller fractional pieces of metal ARE more desirable, but hold a considerable amount of premium.
Tip #3: Watch for counterfeits
There are a lot of silver plated counterfeits coming out of China - this has been a problem for the last 10+ years because there is no governmental oversight or regulation on counterfeits. It is a multi-billion dollar business for the Chinese economy.
In the last five years, the counterfeits have gotten so bad that there are fake “90%” dimes. The cost to make a counterfeit, especially in the size of a dime, is a fraction of cents. If it costs 3 cents USD to make but sold for $1.30 to someone that doesn’t know any better, it can still be lucrative for someone who is dishonest.
Tip #4: Save receipts
Always keep your receipts, even if you don’t plan on doing cost averaging over the course of several years. Cost averaging will help you track and evaluate your investing habits.
You will also need your receipts for insurance purposes: you will need to prove the value of your investments in case of damage or theft.
Tip #5: Avoid credit card interest
When purchasing silver, don’t put it on a credit card and pay interest on it: the average credit card interest rate is currently 18.17 percent. This defeats the purpose of buying and holding the physical asset.
Tip #6: Avoid unknown dealers
Look at a seller’s feedback online - do they have a reputation for selling legitimate items? Stay away from eBay sellers that have less than 100 feedback. Similarly, do not buy metals off of Craigslist, or from a random stranger. You will have no recourse if something occurs and the purchase ends up being a dud.
Most eBay sellers do not offer refunds on bullion because the market is so volatile, or because a customer could do a switcheroo and send back a counterfeit item. I’ve seen it time and time again that sellers end up getting cheated. Do your due diligence when buying online.
Tip #7: Stay away from marketing gimmicks
Stay away from the late-night TV marketing shows offering “rare” silver American eagles with payments. If they are allowing you to do payments over the course of several months, it is a marketing gimmick. The company more than likely paid $50 to $100 for the item and are now retailing it for $300 “on payments”.
Tip #8: Avoid large online retailers
Large online retailers do sell real bullion items, but their premiums are so large that you could end up losing money. Find someone near you that makes you feel comfortable and with whom you can build a lasting business relationship.
Tip #9: Don’t pay for storage
Stay as far away as you can from any company willing to store physical silver for you in exchange for money. There was a large write-up on a company that did this service for people. The CEO was stealing large sums of money from their “investors” with no physical metals to back up their investment.
If you would like to learn more about investing in silver, please reach out to us at A1 Coin, Bullion, & Estate to set up a meeting, or stop by our physical location at 4209 SW 21st St in Topeka, KS.