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Bullion vs Collectible Coins

KUCHKUCH Posts: 1,186
in Precious Metals
What would be the advantages/disadvantages of stacking bullion vs collectible coins?

Comments

  • bronco2078bronco2078 Posts: 10,225 ✭✭✭✭✭


    Stacking bullion means there is only one variable . Spot price will determine how well you do.

    What do you mean by collectible coins? Old silver dollars or something of the sort that you pay a premium for that are established series ?

    Or are you talking about trying to identify newer coins that may be smart to buy because they may turn out to be valuable in the future?
  • JohnMabenJohnMaben Posts: 957 ✭✭✭
    A thorough response to this could easily be 10 page long, but...

    Buying bullion is pretty straight forward- a hedge against inflation, diversify with a hard asset, believing that short or long term metals prices will rise or that everything else will decrease in value more.

    Buying numismatic or semi-numismatic items may have a precious metals component but prices do not change in exact concert with spot prices because they are even more supply and demand driven with factors such as mintage and grading playing a major role in value.

    Instead of choosing one approach or the other, many do both.

    John Maben
    Pegasus Coin and Jewelry (Brick and Mortar)
    ANA LM, PNG, APMD, FUN, Etc
    800-381-2646

  • PerryHallPerryHall Posts: 46,140 ✭✭✭✭✭
    Good answers. The buy-sell spread on bullion is quite narrow unlike rare coins. Bullion is very liquid and easy to sell compared to rare coins. Also, it's far easier to establish the value of bullion compared to rare coins.

    Worry is the interest you pay on a debt you may not owe.
    "Paper money eventually returns to its intrinsic value---zero."----Voltaire
    "Everything you say should be true, but not everything true should be said."----Voltaire

  • derrybderryb Posts: 36,824 ✭✭✭✭✭
    by collectible coins, I assume you are referring to modern non precious metal coins and older coins that may contain a high percentage of a precious metal. These type collectible coins are mostly independent of PM spot prices and are price driven strictly by collectors. PM content only serves to set a floor on price.


    Bullion collector coins are another story, with their base price fixed to PMs plus a premium that is determined by rarity, mintage and grade. American Eagles are a good example of bullion collector coins with the US Mint producing regular bullion coins in massive quantities, and special collector coins (normally with a mintmark) such as proofs, burnished business strike versions and the occassional limited edition special issue. Those not produced in massives quantites carry the highest premiums. Unless "regular" bullion coins (mass production) have a collector premium as a result of a perfect "70" TPG grade, they will sell for spot plus a small premium.


    There are many successful dealers in bullion collector coins who smartly use their profits to stack cheaper bullion. There is a good market in graded bullion collector coins.

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • rickoricko Posts: 98,724 ✭✭✭✭✭
    I collect coins and I stack PM's..... one is a hobby for fun (I do not sell coins), the other is a long term investment.... I have more faith in my investment. Cheers, RickO
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