Collecting silver coins can be an enjoyable, affordable and lucrative pastime. You do not need a fortune to get started yet you can build a hobby into a respectable, profitable business if you avoid the potential pitfalls and stick to some basic valuation rules.
I wrote this article when my personal collection of silver coins started to build. Although there are a plethora of numismatic books covering all manner of specialty subjects I have yet to locate one that deals with the collection of all coins with a high silver content for pleasure and profit. Hopefully that imbalance is at now redressed.
For our definition an average "silver bullion coin" consists of 1 troy ounce of pure (.999) silver. Unlike other coins, which may contain silver in part, the fact that these coins are, effectively, solid silver gives them a unique investment advantage. We can instantly obtain the base metal value of the coin simply by checking the world's spot silver price at any time on a website such as Kitco.com.
Silver bullion coins make a great investment and many have beautiful and unique designs. Some - such as the Australian Kookaburra - are also legal tender. Popular examples of recent silver bullion coins include the Somalian African Monkey, The Canadian Maple, The Mexican Libertad, The Australian Kookaburra, the Chinese Panda and the American Silver Dollar Eagle (and variants of all these, including special editions and collector's sets). The British Britannia bullion coin contains marginally less silver, at 95.8%.
Gold bullion coin collecting offers even greater opportunity for profit, and exactly the same principles apply.
The ownership of gold is proving a popular and lucrative investment proposition. With world currencies in a state of flux, gold is also seen as the perfect hedge against inflation. Whilst the prices of any precious metal can go down, a cursory glance over a gold chart will show an inexorable rise over the years. This trend is likely to continue, possibly even escalate due to the current currency weakness created by the global "credit crunch".
One option to obtain maximum exposure to gold value is to own an EFT (Exchange Traded Fund). One such vehicle which tracks the actual price of physical gold (as opposed to owning a gold mining stock, for instance) is PHAU. Many share dealers will allow you to trade this ETF which you can buy and sell online like any share. Check with the broker for terms and conditions.
In a nutshell it has never been easier (or more affordable) to own gold without having to have a kings ransom worth of bullion (and the associated security risks) lying around your house.
