If you are new to the idea of buying silver and want to learn how to buy silver, there are hundreds of resources available on the Internet. Essentially, buying silver correctly boils down to three different things.
First and foremost, you have to make sure you buy the right kind of silver coins. If you are intending to keep your silver coins for fewer than three years, you should probably invest only in silver bullion coins. These are valued mostly on their silver content and whatever the current market price of silver happens to be at time of purchase or sale.
The most popular silver bullion coins are United States Silver Eagle coins and Silver Trade Unit (Rounds). These two products are the world’s most actively traded silver bullion coins. Therefore, they have the lowest profit margins for dealers who specialize in any silver bullion investments.
If you are intending to keep your investments on a more long-term basis which is three years or more, you should invest in investment silver coins. These silver coins are values based on both their silver content and current market demand at time of purchase or sale. Investment coins will also be more valuable based on other factors such as the year in which they were minted, the mint mark they carry, their condition and demand from other collectors. Obviously, the rarer the coin is, the more it will command in terms of price and the more valuable it will be. Investment silver coins have a great history of appreciation over the long-term.
The two top silver investment coins are the $1 Silver Morgan and the $1 Silver Peace Dollar.
The second most important thing to know is the correct price to pay. When working with a silver dealer if he or she is unwilling to disclose their profit margins and buy/sell spread, find another dealer immediately.
Dealers who wok in the wholesale market (meaning they sell large quantities of coins) should have a buy/sell spread of no more than 50 cents per ounce profit. As in the financial investment world, there are always transaction fees. In silver, these should be no more than $0.50 per ounce per spread.
Wholesale marketers of premium rare and collectible investment quality silver coins like the Silver Peace or the Morgan Dollar should have about a 10-15% profit margin. If you are quoted a higher price, steer clear of the seller. In order to determine if you are meeting with a wholesale marketer or not, ask them these two questions: How much is your profit margin on this bullion item or coin? And are you a wholesale marketer or commissioned retail salesperson? If the answer to either of these questions is unsatisfactory to you, find another dealer because you will probably be paying too much for your silver.
Make sure that your dealer is a member of the Professional Numismatic Association. This is a private members-only association of ethical and reputable numismatic dealers. All members must be voted in before they are eligible to join the association. If you follow these tips you will certainly be comfortable that you know how to buy silver when you go to make your purchase.
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