Real Money

Max answers:

Yes — that’s one of the ways to create wealth or at least preserve it in volatile times. Investing in silver and other precious metals (notably gold) is a way to beat inflation and ‘hedge’ your finances against political & economic uncertainty. Between 1971-1981, when the US Dollar lost more than half of its value, silver prices rose nearly 5 times.

Silver is the least expensive of all precious metals, so investing in it is a way to diversify your portfolio. See it as a way to preserve your wealth and a smart option for financial security. You can invest in silver as bullion bars, coins, mutual funds and certificates, among others. Each has its advantages and disadvantages.

Max answers:

Minting costs, and therefore premiums are typically less for bars than for rounds (coins). The reason is because there is more labor involved in minting 100 1oz coins than there is a single 100oz bar.

Then, there is the issue of private minting, vs. Government minting. Government minted coins command a higher premium because they are widely recognized and therefore perhaps more trusted to be of the purity and weight that is stamped on them. However, in the case of Silver, the value of a 1 oz round is not sufficient (at least not yet) to make private minted “fakes” much of a problem. Many investors prefer private minted silver coins and bars because of the lower premiums. There is an argument that in a currency crisis, the premium currently commanded by government coins could mostly evaporate (an idea supported by other currency crises throughout history), and therefore paying a premium for gov’t minted coins is a waste. (Silver is Silver is Silver…)
There is a of course a possibility that this idea is wrong, in which case the premium paid will be retained when you go to sell or spend the coins. It’s your choice.
Personally, I’d rather pay less for a coin or bar that has no chance of losing something it never had – i.e. A price premium for being government minted. Silver coins or bars, regardless of who minted them will never be worth less than the current worldwide spot price of Silver.

As for difference between different years of gov’t minted coins, that’s mainly due to the relative rarity of the years they were minted. Once again, that perceived numismatic value difference could disappear quite quickly.

One final fact to consider is that 99.9% Silver coins, regardless of mintage, are unsuitable for circulating coinage. Pure silver coins wear VERY quickly in circulation, which is why almost all silver coins intended for circulation were alloyed with other metals such as copper. Some people prefer to invest in 90% Silver US coins (pre-1965 dimes, quarters, halves, and dollars) because they are durable, gov’t minted, and command much lower premiums than pure silver coins or bars.

Max answers:

Raja is quite incorrect. Futures are not a right to buy or sell in the futures – that is an option. When you buy a futures contract, you are entering a contract to take delivery in the future – you can either actually take delivery, or offset your position (at a profit or loss) prior to the delivery period.