The Incredible Investment Potential Found In Junk Silver Coins
Have you ever considered the idea of investing and trading in junk silver coins? Most would probably reply in the negative for this one. The reason is because most of us are only familiar with the investment value that can be found in precious silver coins, those that can be viewed as rare collectibles. It would surprise you however that so called junk silver coins are largely responsible for the success enjoyed by the silver industry as a whole, and as such can be a very profitable means for the savvy precious metals investor. Looking at it this way only goes to show that there is little ‘junk’ contained in investing in junk silver coins.
So what are junk silver coins exactly? Unveiling the jargon used in the precious metals industry reveals that they are silver coins that contain 90% silver content or less. These are different to pure bullion silver coins – that have been minted from higher quality silver that has been graded at a purity of 99.9%. Junk silver coins can be further differentiated from silver round bars – that are known also to be manufactured from silver that is rich in purity.
Why then should you consider even investing in junk silver coins? Well for one thing, they offer investors incredible liquidity and are often traded in large quantities. This is exactly what makes junk silver coins so popular among precious metals investors. Selling individual junk silver coins will not see you any realistic benefit. Rather they are mostly sold in bags of fixed quantities. Examples of this include bags which can are labeled as $100, $250, $500 and $1000. Mercury and Roosevelt dimes, Washington quarters, and Franklin half dollars are some of the popular junk silver coins in the market today. That is not to say that you would have to base your bags on exact amounts of a particular branded junk silver coin. This is so because bag values are based purely on combined weights made up of coins that have a similar silver content.
A typical example of how you would go about selling a bag of junk silver coins to silver coin dealers is demonstrated below. For example, if you wish to sell Franklin half dollars, then a $500 named bag of these coins would contain exactly 1000 pieces of half dollar coins. Given that each of the coins have a silver rating of 90%, and with each of them weighing 0.36169 ounces, means that your bag actually has 361.69 exact ounces of silver. Now after observing the silver spot prices of the day, assuming it sat at about $30, would translate to a $500 bag having a silver value of an amazing $10,850.70.
Remember that this is possible only because of the effect the silver spot prices have in this market. That is why the sale of individual coins would not be practical. It is only through quantity sales that the significance of junk silver coins can be fully appreciated. Let us see what we could do, taking our $500 bag example a bit further, if the silver spot price were to rise by a mere dollar in a day’s time. The bag’s value based on the spot price of $30, as has been mentioned, was $10,850.70. Looking at the spot price of $31, the bag would now have a value of $11,212.39. This is remarkable, and an easy profit of $361.69 could literally be made it a matter of 24 hours.
Of course the real world story of junk silver coins is a little more complicated than that. Silver coin dealers and other silver coin buyers also need to profit from their ventures as much as you do which means it would be almost impossible to buy or sell at the actual spot price. It is for this reason that one of the biggest challenges in selling junk silver coins lies in being able to find a suitable buyer or coin dealer that trades nearer to the spot price. Add to this the fact that most dealers have very competitive pricing schemes and you will begin to see the bigger picture.
That is not to say that you should dismiss junk silver coins as lesser equivalents of their more prestigious coin counterparts. They have proven to be extremely profitable in most cases even though they contain smaller amounts of silver. The silver market in fact thrives because of 90% silver coins and for this reason investors should be more open to incorporating them into their portfolios, so as to take better advantage of the ever fluctuating spot price of silver.
Learn more about junk silver coins. Stop by Atlanta Gold and Coin Buyers’ site where you can find out all about 90% silver coins and what they can do for you.