Investing in Silver

[ThatCopperSound]

In what form is silver the best investment? (bars, rounds, coins) I am looking to start investing in silver, but I want to pay melt value or as little over melt value as possible. Although, I am only 17 years old, my goal is to start a retirement fund.

Is there any discernible way to spot a fake?

Also for those who deal with ebay, do you have any tips? or do you have the name of members who are more reputable?

I am basically looking for as much information and tips as you guys are willing to give me.


ThatCopperSound

 

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[jeff of pa]

I Would say, Invest in Silver U.S. Coins
at Melt Value.

In the long run, Because so many Silver coins
have been Melted & Will continue to be melted.

Alot of these coins that are only worth Melt Now,
But some may have a Premium on them by the time you retire.

Silver Rounds & Bars will always only be worth Melt

 

[mts]

For those of you who aren't aware of the history here, this topic was started over on the CRH'ing forum: http://forum.treasurenet.com/index.php/topic,448288.0.html

I asked ThatCopperSound to bring it over here to get the advice of the "experts" that this forum has to offer. Although the experts are better suited to answer these questions, I'll give them a shot anyway.

1. Spotting fakes is not easy. The big problem is that China is currently manufacturing fakes that are so realistic, even the experts are fooled. Keep in mind that there are certain types of products that are more often faked. The counterfeiters aren't going to waste time trying to construct a perfect copy of a Roosevelt junk silver dime. It just isn't worth the time. So they stick with silver eagles, gold bullion, rare silver dollars, and anything else that is higher valued. That's why US junk silver coins can be a fairly safe investment. It really isn't worth their time to fake these coins (yet). That doesn't mean that you won't find fakes. But you won't readily find fakes of US junk silver.

2. In order to lessen the possibility of buying a bunch of fakes, diversify. Instead of buying $10,000 worth of silver from one source, buy $1000 worth from 10 sources.

3. Always be sure to buy from reputable sources (especially gold and large amounts of silver). It only takes one fake coin to wipe out a lifetime of savings from less than reputable sources. For example, let's say that you feel like you are saving 5% by buying on ebay. If that coin is a fake, you will have to save 5% on the next 20 coins to make up for the loss. This is especially true of gold. Buying a fake gold coin can be a $1600+ mistake. It's not as big of a deal when buying small amounts of silver. But no one wants to find out that they have purchased fake goods.

4. Do some reading on the recent surge in counterfeiting. There is a lot of information about it online.

5. Don't worry yourself to death about counterfeiting. Be sensible about it, but don't let it completely control your life.

6. As I said in the other post, don't worry too much about the premiums at this point in the game. You are 17 and you won't care whether you paid 1.0X spot or 1.05X spot when you get to be 60. Don't spend haphazardly, but don't bend over dollars to pick up pennies either. Some people spend so much time and take so many risks to save a few percentage points that they end up hurting themselves in the long run.

7. I think you should buy what makes you happy. Some people like old coins, some people like pure bullion. Me? I like it all. Think about what your long term goals are. At this point in your life you likely don't even know what you will end up liking. So buy a little bit of each type and see what you like the best. The main thing is to get some silver in hand and then start deciding where to go from there.

8. My long term goal is to hand my kids/grandkids a big treasure chest full of gold and silver when I am old and gray. With that said, I think it would be neater to receive a treasure chest full of lots of different types of PM's (old coins, bars, rounds, rings, etc.) than to receive a chest filled with nothing but 1 ounce silver bars. So I like to buy a little bit of everything. I have bars, rounds, bullion coins, US junk silver, Canadian junk silver, Mexican coins, and many other types of PM's. I even have gold rings, chains, and pins that I've picked up metal detecting or from other sources. It's much more fun to get out a large collection of different things to show to the kids than to show them 1000 bars that all look the same.

9. How much do you have to spend? The more you have to spend the more you need to concern yourself with premiums and fakes. If you were looking to spend around $200 or less, I'd recommend just going out to Provident Metals or APMEX and just picking whatever interests you. Don't worry about paying a little more by using a credit card. On a $200 purchase, the 3% up-charge for using a credit card amounts to a whopping $6. Quite frankly, I'd rather pay $6 more than have to run out and deal with getting a cashiers check. Also, that $6 gives you peace of mind because you are covered should the shipment get lost or something else happens.

10. As I said in the other thread, monthly coin shows can be a great place to get some good deals. We have a local coin show that occurs every third Sunday of the month. They have the exact same vendors each month and they are good people. If I had a problem with a purchase I could go back the next month and the same guys would be there. It's not some "fly by night" coin show. Most of them don't charge tax and you aren't going to pay shipping. They often have large buckets of junk silver for sale at spot prices. In the past I've been able to buy at significantly below spot by making a large purchase but that has been getting harder to do. The downside to coin shows is that most of the vendors are more concerned about selling graded rare coins than they are junk silver. So there will be fewer vendors selling the stuff you will be looking for. I don't buy graded coins at all so I have less to look at when I go to the show. But it is still fun.

I hope this gets you started. There is a lot to know and there are some good people on this forum who can give you guidance. I'm happy to chime in with more info if you have questions. My standard disclaimer applies though.

 

[jeff of pa]

Avoid buying Silver dollars & Rare Date coins on Ebay

Also don't expect to get a deal on rare coins.

In short, Unless your a Billionare

stick with Melt Value coins

& anything that seems to be too good should be avoided

 

[jim4silver]

Like others have said, old US 90% dimes, quarters and halves are generally safe bets as long as they are not rare years and show some wear. There have been Chinese fakes of older and rarer year coins in these denominations.

However, in my opinion there are preferable forms of silver bullion to own (.999) as compared to junk silver, and these can be found for not much more than junk silver if you look around. The caveat is that here is where you might run into fakes if you don't know what you are doing. If you want bullion that is .999 and want to know it is legit, your best bet is to buy brand new 1 ounce bars/rounds and 5 or 10 ounce bars from a reputable coin dealer and get the NTR bars, Sunshine Mint, Wall Street, SilverTowne, etc. Most coin dealers buy these brand new from the distributors and the bars are still in the original plastic. I think your odds of getting a fake if bought in this manner are generally nil, at least for now.

If you don't mind paying higher premiums, you could buy rolls or a sealed "monster box" of US silver eagles from a reputable coin dealer. I have never heard of these being faked in such a manner. Probably same with Maples.

I would avoid old US silver dollars, even ones that look worn. From what I have read, these are being faked from China in large numbers, and even ones that are not rare years and look worn.

If silver ever does really go up, like to 75 or 100 bucks, you can bet there will be a ton of counterfeit silver products. It is much easier to fake silver coins than gold. Gold has a unique weight density that makes it very difficult to fake when using coins of known dimensions- size and weight. The only two metals that can be used to counterfeit gold successfully are platinum, which until recently has always been more valuable than gold, and tungsten, which can be used to make counterfeit bars, but difficult to use to make coins due to its brittle nature from what I have read. Any other metals used to fake gold will make the coins either too large (if the weight is correct) or too light (if the size is exact to the real coin).

I won't be buying silver once it gets that expensive, so hopefully I will avoid any waves of counterfeits if they do increase out there. I have only encountered a couple of fake silver .999 rounds/bars that were shown to me by a coin dealer acquaintance. If you dropped them the sound definitely did not "ping" like real silver coins do. They looked kind of cheaply made and were not made to look like any well known brand bars/rounds that I had ever seen before. But they were stamped .999 fine silver.

Jim