My Big Deal Buying Silver Bullion
My Big Deal Buying Silver Bullion
By Chuck RitenouR
I used to collect coins. I started buying U.S. coins in 1985. I dealt with several really good dealers. My favorite dealer was Phoenix Rare Coin Company. They would send a monthly catalog and took great pains in giving an accurate description of the coins. Depending on the wear and tear on a coin, it could be graded as low as Good-3 which is very worn with scares, holes and dents to as high as Mint State-70 which would mean it had never been touched by human hands and was flawless. As you moved up the grades, the prices are higher. Every now and then a coin would be graded extra fine-45 but would have a flaw such as a hair line scratch somewhere. These coins were great values because the price was lowered substantially yet the coin itself was very appealing to the eye. I concentrated on these coins in the Very Fine-20 to Extra Fine-45 range.
My first few purchases were Morgan Silver Dollars and Peace Silver Dollars. In 1985, you could get some very nice coins in Extra Fine-40 to 45 for under $25.00. I loved to pick them up and feel their weight in my hand. U.S. Silver Dollars are 90% silver. I read several books as well as issue after issue of "Coinage" and "Coins" magazine. These magazines are still great reading and very educational for collectors of all ages and incomes whether you are a new numismatist or have been collecting for years.
When my second wife and I split up in 1996, I broke down my coin collection and set aside 3 different sets of coins for my daughters. I also set aside a few for myself as well as a large collection which was sold at auction. The coins graded by the auctioneer were given much better grades than I expected. Basically, I made enough money to pay for all the coins I had set aside and more. A few years ago, I gave each of the girls a cigar box full of "old money". Though as of this writing, they have started collecting on their own.
Recently, I have become intrigued by the rising price of gold and silver. I had read a very interesting report by Stansberry & Associates concerning owning some of the precious metals. After discussing it with my bestest buddy, we decided to look for deals on silver bullion and set a goal of owning 100 ounces of .999 fine silver by the end of the year.
Silver bullion comes in many shapes and sizes. You can purchase one ounce rounds and ingots from many companies( just google Silver Bullion and check out some of the sites). The price is usually a few dollars above the "spot" price ( you can find that by checking its trading value on the internet or heaven forbid, buy a news paper). You will also usually have a shipping and handling fee. The report said that traditionally silver prices were 1/16 the price of gold. That means (if that is true) silver should be at $86.48 a troy ounce. Today, silver closed at $29.63. Over the next year, the report said it should continue to move towards the 1/16 mark. When you take into consideration our national debt and that very soon the U.S. dollar may lose its standing as the "World Reserve Currency" owning some silver (or gold) would appear to be a great idea.
Economists are always yapping about having gold in your portfolio. Silver has always been the poor man's gold. So yesterday, I set out to see if I could find any deals on silver bullion or silver dollars. I checked the local pawn shop. Sure enough, Mike had removed all his silver from his cases. Then I started checking the small jewelry shops and antique stores. It took a few hours, but it paid off.
The last store on Main Street was an antique store. It had cases of old jewelry. In one of the cases, I saw 5 pieces of silver. They were all .999 fine silver and were Xmas motif. Three of them were enameled (the design had been painted). The other two were plain rounds with Santa on the obverse. One of the enameled pieces was an ingot. The enameled pieces were marked $15 a piece and the plain ones were $10. I asked the lady behind the counter if I could see them. I tried my best to look only mildly interested. I started to walk away then turned and asked her, "what's your rock bottom price for all of them. She looked at them for a moment and said, "I'll take $50.00 for all five, but you'll have to pay the tax of $2.50." I said, "deal !" We need to purchase 12.5 ounces a month to meet our goal, but we are on our way.
By today's silver price, I had just made $95.65 profit. Of course, the price of precious metals will fluctuate. When the stock market rallies, the price will go down abit. When the market goes down, it will go up. I have seen conservative predictions that gold will reach $1600.00 an ounce and bullish predictions that it will reach $2000.00 an ounce by the end of 2011. As gold goes, so goes silver. Better getcha some!