Numismatic Silver

Numismatics coins are those that are considered collectible in the coin industry. They are well-regarded coins that have achieved the status “collectable” with experts and investors alike.  The coin collection industry is worth an estimated $10 billion annually in the US alone.

Some silver coins that were manufactured to be collectible have ended up not being so. These coins tend to be sold around the spot price of silver with little “collector mark-up”. Conversely, some coins that were introduced as standard currency for circulation are now deemed collectable coins and cost a lot more than their silver content value.

Investing in Coins or Silver

When investing in coins it is important to recognize exactly what the asset represents. With rare coins you are not seeking to gain value only from the precious metal content, but also the “market value” of the coin. The prices of collector coins are often nowhere near the spot price of the silver contained, as they are priced as rare objects of value, desired by other collectors.

Silver metal “bullion” investors buy-up physical silver as close to spot price as possible. They are not looking to benefit directly from the scarcity and desirability of the coins they acquire, so they are wise to stay away from numismatic products which can carry 50% or even higher markups over spot price.

Grading Coins

There is an established grading system to rate the condition of coins. Collector coins are prized largely on their condition, as collectors look to enlarge and enhance their collection with mint or near mint state coins. Professionally graded coins are given a number between 1 and 70 based on their condition. Rating companies will also confirm the authenticity of the coin, an important benefit with high value coins.  The best known and most respected coin rating companies are PCGS and NGC.

Investing in Collector Coins is Not Easy!

Many people have lost money when trying to enter the collectible coin market. There are many dealers that, eager to get the most out of their stock, claim that coins have a certain value based on rarity.  In reality the markup is sometimes so high that it is nearly impossible to gain investment returns in the short, medium and perhaps even long-term.

Often the prices of these coins is set at 30% to 80% over the spot price of the silver despite them having no significant “collector value”.  It takes an extremely experienced and knowledgeable coin enthusiast to enter this market and make good investment decisions.

Beware of Unscrupulous Salespeople

Many coin vendors have claimed to buyers that their collectible coins are not traceable and are therefore better than bullion coins. Telemarketers have even used the sales script that “collectable coins are of higher value because they will not be subject to “recall” if the US Government ever made it illegal to own silver” (as they have done in the past). These are scare tactics designed to enable them to sell their “collector” coins at high prices above spot.

Hobby vs Career

Many coin collectors really enjoy their hobby. They invest their money not merely for the financial rewards but to build their impressive collection. They go to exhibitions, jumble sales and coin fairs in pursuit of their hoppy. They keep an eye on silver forums and websites in search of the rare coins that they desire.

Some hobbyists end up turning their pastime into their career as they gain knowledge and understanding of the market value of different coins. They learn to avoid the telemarketers and scammers and find great sources for value coins. They make good informed purchasing decisions, and can even become professional numismatists, working for coin dealers full-time.

Types and Examples of Numismatic Coins

Some old American coins are considered semi-numismatic. They are both bullion and somewhat collectable. Their collector value is limited and their price tends to be driven by the price of the precious metals content. Silver Eagles are perhaps a good example. Other coins are genuinely rare and are much coveted by collectors. These coins are worth more than the sum of their parts.

Whether you are a collector or an investor it is important to ensure you are aware of the value of the coins that you are buying. You should pay around the right market value or you will end up wasting your money, especially if you aren’t knowledgeable of the numismatic market.