I like to invest in precious metals, both on the stock side, as well as in bullion. Lately I’ve noticed the price of silver has been under-performing relative to gold. The price of gold today (about $1600/oz) is pretty much the same as it was 12 months ago. But silver on the other hand went from $37/oz a year ago to $27/oz today. That’s a pretty big drop (O_o) Since I know that the value of either ore (^_^) can’t decrease indefinitely, I think now would be a good time to increase my silver exposure.
So a few days ago I picked up 3 silver coins at the local bullion exchange (VBCE) in downtown Vancouver. They weigh 1 ounce each. These beauties can be purchased by anyone. Just contact your local bullion dealership. You can also buy them from an online broker these days, or ask me for further details. If you don’t care for the maple leaf design you can also purchase regular silver bullion for practically the spot price of the metal. For readers south of the border, you can buy the American Silver Eagles instead.
It can be argued that precious metals (gold, silver, palladium, etc) aren’t real investments because they don’t generate any returns, and the price of these metals are largely based on speculation. But the reason I like to own physical silver is because it’s really shiny and fun to hold and look at. Plus it’s a hedge against inflation. And I personally believe there is a fundamental element of supply/demand that affects it’s price because silver is an essential component in the making of cell phones, cameras, mirrors, cars, solar panels, computers, laptops, TVs, and a bunch of other necessities for the modern society.
image credit: dailyreckoning.com
Bullion: A piece of high quality, relatively pure, gold or silver coin, bar, or sometimes ingot.
Spot Price: The current market price of a commodity if the trade was done immediately.
Palladium: A rare, metal element (Pd) with similar properties as platinum. It is mostly used in catalytic converters.
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Random Useless Fact: In 2007 the government made a huge gold coin that weighs 100 kilograms (220lb). Back then 100 kg, or 3215 oz of gold was worth $2 million. Today it’s worth $5.1 million.
I’ve been investing in silver for 2 years, going in and out of my position. I too believe that silver is in a major bull market, but I think that silver will fall a little more before it surges towards the end of this bull market. Just a few questions.
I used to buy physical silver too.
If you’re using it as an investment, why not buy silver bars as opposed to the Maple Leaf .9999 (which has a higher premium that silver bars)? Aren’t you paying more?
Why not just invest in a silver ETF (that way, you won’t have to pay the premium that the dealer charges you?)
We have the same prediction, I think silver is going to fall lower too based on its current downward momentum. Oh well, I’ll just buy 5 or 10 more coins when it goes below $25/oz or something. I think you’re right, silver bars would be a better store of value. I plan to buy some in the future. The premium I paid for the maple leafs does have a silver lining too because the premium is permanent. So if I were to sell one some day it should fetch higher than a one ounce silver bar. The extra premium comes from it’s quality, rarity, and association with the RCM. I’m hopeful that these qualities will stay with the coin and add a premium to it each time it is traded on the secondary market :). Even if that’s not the case, I think it has sentimental value and I might decide to pass it down to my future kids some day. Silver ETFs are great too. I haven’t done too much research on them myself. do you know any good names? So far in terms of silver, most of my investments is with a silver streaming company called Silver Wheaton… Read more »
You’re right, the sentimental value is pretty important (which is why I bought some Chinese Silver Panda coins). As for ETFs, I use SLV (which is a long only no-leverage ETF). Beware of the leveraged and short ETFs, because those don’t match silver’s price very well.
I think it would be kind of cool to have some kind of physical investment instead of just what you can see in your investment portfolio. I don’t know if I would go that route, but I could see why someone might. As for the random fact, talk about government wasteful spending.
I don’t know how much they paid those engineers and designers to make that huge gold coin but I bet it was more than what you or I make.
“But the reason I like to own physical silver is because it’s really shiny and fun to hold and look at”
I’m sold LMAO
Awesome article, like many I had no idea they were this easy to get.
Some people may not be aware of this but it’s possible to buy bullion from the big banks like TD, Scotiabank, RBC, etc… Coin dealers are everywhere. There are a bunch of places in downtown Toronto that sells silver/gold coins. It’s literally as simple as walking into the building, paying cash, and leaving with the coins in your pocket. No forms to fill out, no registration or anything. At least that’s been my experience so far with the one I used in Vancouver. In the US I’ve heard apmex.com is a great place to buy them. And here’s a guide for any Canadians interested to learn more sunnahmoney.com/buyers-guide/canada.
My sister bought some silver coins recently and told me I should do the same…. I told her my Tiffany jewelry was enough 😉
Good for her, your sis sounds like a pretty smart cookie :). Tiffany & Co is one of my favorite brands. Keep your jewelry in good condition and they could be worth a lot some day because of the name.
Any thoughts on the website: silvergoldbull.com ?
Ooo looks like they have a nice selection there. To be honest I haven’t heard of them before. But doing a quick Google search on different people’s reviews and sentiments they appear to be a pretty reputable place to trade gold/silver. If anyone has used them before let us know.
I agree, I think i prefer the bars to the coins.
Finally give me something to put in the free TD safety deposit box instead of the dust that is in there now.
I’ve been buying silver and gold coins for a few years now from http://colonialacres.com . They have been very reliable. I have been purchasing both S&G Bullion from them with no issues. I prefer the coins personally, as they feel more like money :). Another alternative is http://www.scotiamocatta.com/ , which I have yet to use, as the previous link has worked for anything I have wanted.
Thanks for the info Phil. Certainly no shortage of places to buy coins in Canada :0).
The only trouble with ordering online is that you have to add in the cost of delivery and premiums to your coin and bullion prices, a $100 purchase of silver might end up costing you $115 making a longer wait for the price to rise enough to make it worthwhile selling at the spot price. Buying locally you just have to absorb the sellers premium which can vary from one seller to another so its worth it to reaserch and shop around.
Hey sorry I haven’t been around lately, been so busy! I bought some silver back when it was $18 an ounce and I prefer the maple leaf coins because yes, they are shiny and fun to hold in your hand. That and coins are easier to liquidate if need be compared to the 10 oz bars.
$18 is so cheap, good for you. I’m sure they’ll climb to at least $40 some day. But when is the question. Good point about the liquidity.
Steve, I recently move back to Edmonton. I follow your blog as well from time to time. I was wondering if you know any reputable coin dealers in this city. I went to the West Edmonton Coin and Stamp store in the West Edmonton mall a few times. The prices for 1oz Silver eagle seemed to be a lot higher than the current market price. Maybe there sign was wrong LOL.
Thanks
Hi Maritimer, Im a fellow Edmontonian from the far east of Canada, it may be too late since you posted in 2012 but I go to MRCS Canada at 12303 118th ave. Edmonton , which sells a gret deal of bullion as well as RCM collectable coins. The business is located in an old Royal Bank Building. The prices there are indeed lower than those at the West Edmonton Coin and Stamp since they don’t have to deal with the enormous rent for their space that West Edmonton Mall charges their tenants.
nice stuff abpout how to buy silver coin.
Thanks. Silver is definitely where it’s at today.
Do you have any opinions on privately minted silver coins for the bullion value? I have a number of them (1oz) I bought at slighlly above spot from Westminster mint. I prefer these as your not paying a premium for the numismatic value. I also like old american junk coin. Chiefly because they are smaller quantities of silver that could be spent in a crisis.
I’m not sure about privately minted coins to be honest. I think as long as it comes from a credible source it should hold its value very well. It would also depend on the reason for buying it. For me, I like to buy gold/silver coins for circulation purposes so if I run into an emergency I can sell the coins at the current spot price of metal. Bullion would be best for this because they have the lowest premium, but the benefit of coins made from well known mints is they make good gifts as well. Once in awhile I like to buy collector coins too for building up my coin collection 😀
Idk if its best to invest in silver bullion at this time, seeing as it really hasn’t exploded like some experts said it would.
I have been a coin collector for a few years now and mostly buy my collectable silver and gold coins directly from the canadian source The Royal Canadian Mint … google ” RCM” for quick access. The collectable value of the coins increases surprisingly fast especially for low mintage coins of under 25000 units world wide. My focus has been the “$20 for $20” series of silver coins sold since 2011. They have a face value of $20 and were sold at $20 (no tax and free shipping) and are only a quarter oz of silver but the first couple versions are already valued at $40 an increase of 200 % I also buy some gold and silver bullion but there is no collectable value to bullion just the rise and fall of the markets.
Great suggestion 🙂 That’s great you got in early and picked up the lower mintage coins. The 2014 series of $20 for $20 coins have a higher mintage. Maybe I will pick up some of the $100 for $100 coins when I have some more savings. Happy collecting 😀 Our coins will certainly be worth more in the future.