Silver, Part 4

I sort of got overly involved in buying precious metals this year (gold, silver parts 1, 2, and 3). I don’t think there is anything wrong with having some precious metals in a portfolio, up to a few percent of total investments, but I probably haven’t been doing it that well. It’s hard to know whether prices will go up or down, but realistically prices would have to go up quite a bit before I could realize any gains by selling physical silver and gold somewhere. Maybe a 40% increase in price to realize a 20% gain. I also put some money in exchange traded funds that you buy like stocks that are much more efficient, allowing a 20% gain with maybe a 24% increase in price. But the price has continued to slide and is down to around $16 per ounce whereas it was $19 when I first started buying and as high as $21 at one point.

UK 2014 Year of the Horse

But the silver coins are nice to look at and has been fun to collect, so that is worth something. And I am learning a few things. I started looking at selling prices and I think some coins do okay in that respect, but for the most part you are better off getting boring old silver bars (and really much better buying ETF shares). Coins cost several dollars more per ounce than the current price of silver, while bars are maybe a dollar or so more. There are privately made coins, called rounds that are somewhere in between there.

One of the sellers, Apmex, keeps track of the current appraisal price of everything you’ve bought from them so you know if you are losing or making money on your purchases. It automatically enters any purchases you have from them, but you can enter other holdings as well, so that I can appraise everything I have. The price of silver is down several dollars from where I bought most everything, so generally the coins are worth less than I paid with a few exceptions. One of those is the Australian Kookaburras which cost over $4 per coin more than the spot price, and while the spot price has dropped a couple of dollars, the Kooks are still worth more than I paid. Meanwhile I am losing money on coins that were cheaper at the time: Vienna Philharmonics, American Eagle, and Canadian Maple. The Australian Koala bear coins, made by the same mint as the Kookaburras, haven’t gone up either, since their production is not limited.


So I think there is an advantage to high quality coins with designs that change each year and where production is limited. The 5-ounce giant US national park quarters have gone up in value too. The most dramatic is 2014’s Utah Arches National Park for which I paid a high premium to get a cool coin for a park I had visited, but it has gone up in value more than the others in that series, up to $200 from the $125 I paid. Meanwhile, a 2014 Virginia Shenandoah coin I bought for $115 is worth less money now. Somehow the Arches coins got sucked up quickly but the mint didn’t make more of them in response to the demand, even though they are supposed to. In the last few weeks I picked up a couple of Maryland Fort McHenry coins from 2013 on eBay which were selling for just over $100 with today’s lower spot price. Maybe those will go up eventually.

Another decent strategy is taking advantage of sales and dips in the market price of silver. JM Bullion had some Britannias they were liquidating after they bought the inventory of a large coin shop that had ordered a special run of Britannia coins with a horse privy mark along the edge. Britannias usually have a high premium but I was able to get them for less than $2 over the spot price on sale. Even though the spot price has dropped about $2 more, these coins are still worth a few more dollars than I paid. In addition to Apmex and JM Bullion, Provident Metals seems to have some very good prices and some very good sales.


Getting what the coins are worth will be nearly impossible, so really that is just the upper end of the range of what things might be worth. The lower end is probably about what the spot price of silver is, though some of the nicer coins plus the US coins still should command a premium over the spot price. The Philharmonics, Armenian coins, and some of the coins from island countries probably won’t be worth more than the spot price unfortunately, making them equivalent to overpriced rounds.


Leave a Reply

Your email address will not be published. Required fields are marked *