90% of precious metals investors jump straight into bullion coins. The American Silver Eagle and the Canadian Maple leafs are among the most popular and honestly, who can blame them. Precious metals are inexpensive and investor’s sentiment leads them to buy the cheapest thing possible. Unfortunately, that 90% do not understand how precious metals truly behave.
The American Eagle Silver dollar is the most popular silver coin in America. It brings out pride in our country and it is has a large reputation, but that reputation comes at a cost. The premium on these coins are usually anywhere between 16% and as far up as 25% and when the market is low, the premiums actually get worst. The Canadian Maples and the Krugerrand aren’t as mean on the pocket but they still suffer from high premiums. Just to be fair, on liquidation some reputable deals will give you a bit over spot on the American Eagles, but most will try and take advantage of your ignorance in the field. In order for investors to break even, they usually have to be invested for a couple of years. Investors justify these high premiums by only looking at precious metals for the long term, or until the investor dies. Precious metals have so much more to offer for the short and medium term investors. In order to take advantage of some of the most overlooked markets, investors need to take the time to educate themselves. Finding the right people willing to educate you and have competitive buy-back programs is usually a good place to get started.
The Morgan Silver Dollar was minted from 1878-1921. It has not only become the most recognizable coin in American but one of the most highly prized coins in the world. Coin dealers in Munich, Germany or Moscow, Russia will liquidate these coins on site. The world knows the value of the coin, because this coin is the most collected silver coin in modern history. Most people understand why coin collectors like these coins, but why would investors be throwing their money into these coins instead of bullion coins? The truth becomes apparent when you look at how Wall Street manipulates gold and silver prices.
Paper gold and silver has become an infection in the precious metals industry. Wall Street has been using their made up gold and silver in order to keep the precious metals prices low. Manipulation of this scale requires quite a bit of money and the way they keep the price of gold and silver down is by buying up short contracts. They have more money in short contracts then there is value of all gold and silver in the world. This directly affects the physical precious metals market. Investors that are buying bullion coins are trying to play a game against some of the biggest cheaters in history. Morgan Silver Dollars are a true supply and demand market. There is no paper market that is attached to it and we are not creating any more of these coins. Investing in Morgan Silver Dollars is comparable to investing in beach front property. When the real estate market goes down, so does the value of beach front property, but only marginally. Beach front property bounces back fairly quickly. If you invest in bullion, in this metaphor you are investing in cheap New Mexico land. When the market goes down, the value of the property gets slaughtered.
Any precious metals expert in this world will tell you to buy the best your money can afford. Bullion coins are not the best your money can afford. Bullion coins are cheap New Mexico land that react violently to the markets whims. Investing in a product that is sought after and cannot be produced anymore gives you protection from the downside of a falling market and captures all the upside of a rising market. That is why people who invest in the Morgan Silver Dollar fair better than those who do not.