Have you ever heard the term “buy the dips” when investing in silver bullion? Buying the dips means to purchase precious-metal assets, like silver coins, when commodity prices seem to be in a temporary lull. This doesn’t mean silver prices will necessarily have to be at the lowest point they have been in months or years to rationalize making the purchase, but perhaps metals prices will be taking a respite off record highs – such as pulling below a certain dollar-price threshold for the first time in a few weeks during an active market. Thus, that could give a buyer a good chance to make a move while prices are relatively soft.
Why might that be an advantageous strategy for those who want to buy silver? Because it can give you an opportunity to enter silver investing or add to your portfolio during a cooling period before bullion prices heat back up. Bear in mind that this information is not to be taken as investment advice but rather as food for thought while mulling possible investment moves you might make – decisions that are made based on your own instincts or based on information and guidance from a professional financial consultant.
Silver coins are frequently bought and sold by bullion investors because they generally contain a high degree of silver purity. The fineness of silver coins typically purchased expressly for silver investment is sometimes on the lower end of the spectrum, ranging between 35% or 40%; however, in the plurality of silver portfolios, the purity of a typical silver coin will hover in the neighborhoods of 80%, 90%, 92.5% or .999%.
Many popular coins hit those silver-purity thresholds, such as Jefferson “War Nickel” Five Cents of the 1940s with their 35% silver composition, the Kennedy Half Dollars of 1965 through 1970 boasting a 40% silver purity, many pre-1968 Canadian silver coins of 80% fineness, a variety of British coins in sterling (92.5%) silver, and a slew of modern bullion and commemorative issues boasting .999-fine purity or finer.
There are many advantages to buying silver coins when trying to make investment purchases on dips. However, before we go into the pros of buying silver coins for investment, let’s touch on a couple of the drawbacks behind purchasing silver coins versus opting for ingots or rounds. The first? Coins generally carry higher numismatic premiums over spot than ingots or rounds. This can increase how much you spend, gram for gram, when buying silver in coin form versus buying silver by way of ingots or rounds. The second thing to remember is that coins often see much greater retail demand than other forms of bullion. That can be great when selling silver but a concern when trying to buy it, especially during public panic frenzies, when it can become difficult to find what you’re looking for in the timeframe you may be hoping to acquire it.
However, the upsides of buying silver coins are numerous, including excellent liquidity, a generally higher resale value than achieved with ingots or rounds (cost-factored gram for gram of metal), and known guarantees of purity backed by government mints. A few other things to remember is that PCGS can grade silver coins for added protection and peace of mind with your silver investments. There’s also the fact that silver coins cater to several potential resale markets, including bullion, numismatic, and niche specialty or genre – the latter especially being the case for modern issues reflecting topical themes such as sports, superheroes, or sociocultural luminaries.