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Most people who are interested in investing in precious metals (including through a self-directed IRA) initially focus on gold. It’s easy to see why. Gold offers more favorable long-term returns than silver, is more easily traded, acts as a more powerful hedge against inflation, and has more speculative uses.
That’s no reason not to look at silver, too, though!
Not only is silver much more affordable, making it accessible for people with less to invest, it even has the potential to out-price gold on occasion — depending on market conditions.
If you’ve decided to invest in silver, whether in addition to gold or as a stand-alone venture, your next decision is between silver bars and coins. So, which is better? There’s no one right answer. Each option has significant pros and cons, and each investor needs to decide what’s the more appropriate option in their unique situation.
Why Silver Coins May Be the Right Choice for You
Silver coins are generally government-issued and minted. For example, the bullion coins issued in the United States are all minted by the US Mint, and other governments also issue silver coins through their sovereign mints. This fact doesn’t just mean that silver coins are recognized as legal tender, but also that these coins have proven quality that buyers will trust in.
Silver coins are easy to trade now, and experts generally believe they’ll be easier to trade during times of true crisis than silver bars as well.
What’s more, their relatively low weight makes silver coins an easy way to get started with investing in silver, even if your budget isn’t very large. They’re easier to store compared to silver bars, which require more space.
Silver coins produced by a national mint have one final advantage. There’s a chance that they’ll one day be seen as numismatic, meaning they have historical value and become collector’s items. In this case, the value of your coins is likely far exceed the value of the silver content itself.
The Unique Advantages of Silver Bullion Bars
Silver bars are easy to mass-produce. They don’t serve as legal tender, and because silver bars will never become numismatic, their value is equivalent to the price of their silver content at any given time. This usually makes silver bars even more affordable than silver coins.
The fact that silver bullion bars are eligible to be part of a Precious Metals IRA makes them especially appealing to investors looking for an alternative to a traditional IRA. Some silver coins may also be held as part of a Precious Metals IRA, but not all qualify, and this makes bars the more interesting option to some investors.
If you choose to store your silver bars at home, they are conveniently shaped to make them stackable. On the other hand, silver bars are less liquid than coins and harder to barter.
What’s Better For You? Silver Bars or Coins?
Silver coins are a great choice for smaller investors for several reasons. They serve as legal tender and may hold sentimental value, especially when passed down through generations. In addition, certain coins may become rare and valuable collector’s items in the future.
These factors generally mean the price of silver coins is higher than the price of silver bars when considering the weight and silver content.
Silver bullion bars are best suited to large-scale investors seeking to diversify their portfolios to prepare for inflation or investors interested in holding silver as part of a Precious Metals IRA.
Silver coins and bars have unique pros and cons, but investors who aren’t sure which option is better can always opt for a mix of both. The choice to buy both silver coins and bars gives you the benefits of both options and prepares you for whatever comes next.