When investing in gold and silver coins there are really two types.
These are bullion coins and numismatic coins.
What Is The Difference Between Bullion And Numismatic Coins?
Bullion coins have value based on the metal content. The value derives from the current price of the silver or gold, plus a small premium charged by the mint for turning that silver or gold into a coin. The value of a bullion coin fluctuates with the market on a minute to minute basis and is very tightly tied to the current market value of the silver or gold of which it is made.
Numismatic coins derive their value from the value of the metal content, but also from the rarity of the coin itself.
There are different grades of numismatic coins. These different grades designate the quality or level of perfection of the the coin based on something called the “Sheldon Scale”.
Silver and gold coins have to be minted, which basically means that a “Mint” has to melt down some raw silver or gold and them pour it into a mold so that a coin can be formed. Some of these coins come out in decent condition and some of these coins come out in absolutely perfect condition (or as perfect as can be observed).
These coins can be send to a grading agency such as NGC (Numismatic Guarantee Corporation), ICG (Independent Coin Graders), PCGS (Professional Coin Grading Service), etc. These agencies will carefully inspect each coin and certify it’s quality by a rating on the Sheldon Scale.
Coins which are considered to be in perfect condition are given an MS70 rating (“mint state 70), with 70 being the highest possible rating on the scale. Coins with the very slightest imperfection may be given an MS69 rating and so one.
Most coin collectors would be interested in the MS70 and MS69 coins.
These would be uncirculated coins.
As time passes these coins would become more valuable, but that value would be affected by rarity as well.
So a coin for which there were only 1000 made on Earth, would theoretically be more valuable than a coin which had 2 million pieces minted.
Numismatic coins have proven to be a very safe investment, whether one is a “coin collector” or not, for various reasons.
One reason is that they can easily be sold. There are tons of dealers around would will purchase them and on any given day you can walk into a coin dealer with a coin and walk out with a check or cash. This would hold true for bullion and numismatic coins.
Generally a numismatic coins would be worth more on the open market due to the fact that it has all the value of the metal content, as well as the value deriving from it’s rarity and quality rating.
However there is much more variation in the perceived value of numismatic coins.
With bullion coins you would pretty much be able to sell them for right around the current price of the metal content on any given day. With numismatic coins, I’ve seen price vary from about $130 to over $990 for the same exact coin on the same day. Could be that the guy asking $990 was nuts, but I can’t be sure. The point is that the value of numismatic coins appears to be much more subjective. The good thing to know though, if you are considering investing in numismatic coins, is that the value of numismatic coins has proven to increase steadily over the years. There is no real record of numismatic coins dropping in value over time, so they are a very safe investment, though perhaps not the highest yield investment that could be found.
Some would say that bullion is a better investment in the current economy because the US dollar is rapidly losing value and we are approaching a hyper-inflation and the the price of silver, for example, may go up as high as $1500 per ounce (currently about $39.50), and to the silver bullion coins would produce the highest return.
This may be true, however, if silver is going up to $1500 per ounce, then buying either form will yield very high returns.
I buy both.
If we happen to hit the type of hyper-inflation like was seen in 2008 Zimbabwe or pre-WWII Germany, both types of coins will be worth billions of dollars.
The reason I buy both is because, if by some miracle, we avoid a hyper-inflation and currency collapse (I don’t see how) and the price of silver metal ends up going back down to a historical range, then I’ve still got numismatic coins which history has shown will continue to increase in value over time.
Preservation Of Wealth offers both bullion and numismatic coins in both silver and gold. The bread-and-butter for Preservation Of Wealth is of course the bullion coins and for two years now POW has boasted the lowest possible price for individuals on gold and silver bullion due to the fact that Preservation Of Wealth relays these coins to their members at dealer cost, with no mark-up and no commissions.
For some time Preservation Of Wealth offered MS69 numismatic coins. Just recently POW has begun offering MS70 numismatic coins to both retail customers and members, as well as an “Optionship”, which is basically an auto-ship for those who are members of Preservation Of Wealth, who also have chosen to earn from referring other members via Preservation Of Wealth’s MLM-type compensation plan.
Members can receive numismatic coins auto-shipped each month and the price of these coins improves with the quantity ordered.
The one thing I’ve observed about Preservation Of Wealth which seems to make it quite different from other gold and silver MLMs, is the fact that their numismatic coins — the ones shipped with the Optionship — are coins of much higher value than what one is paying. This month’s coin (at the time of writing this article), which was a 1986 MS70 Statue Of Liberty. So for the $99 auto-ship one is getting a coin that is current selling for between $289 and $900. Well, membership has it’s privledges.