Investing in precious metals has been a popular strategy for diversifying portfolios and hedging against inflation. Among the various options available, 90% silver coins have gained significant attention in recent years. But is investing in 90% silver coins a good idea? In this article, we will delve into the world of 90% silver coins, exploring their history, benefits, and potential drawbacks to help you make an informed decision.
What are 90% Silver Coins?
90% silver coins, also known as junk silver coins, are coins that contain 90% silver content. These coins were minted in the United States prior to 1965, when the Coinage Act of 1965 eliminated silver from circulating coins. The most common 90% silver coins include:
- Morgan dollars (1878-1904, 1921)
- Peace dollars (1921-1935)
- Walking Liberty half-dollars (1916-1947)
- Franklin half-dollars (1948-1963)
- Kennedy half-dollars (1964)
These coins were originally minted for circulation, but their silver content has made them highly sought after by collectors and investors.
Benefits of Investing in 90% Silver Coins
Investing in 90% silver coins offers several benefits, including:
- Diversification: Adding 90% silver coins to your investment portfolio can provide a hedge against inflation, currency fluctuations, and market volatility.
- Tangible asset: Unlike stocks or bonds, 90% silver coins are tangible assets that you can hold in your hand.
- Limited supply: The supply of 90% silver coins is limited, which can help maintain their value over time.
- Liquidity: 90% silver coins are widely recognized and can be easily sold or traded.
- No counterparty risk: Unlike investing in stocks or bonds, investing in 90% silver coins does not involve counterparty risk, as you are not relying on a third party to honor their obligations.
Potential Drawbacks of Investing in 90% Silver Coins
While investing in 90% silver coins can be a good strategy, there are also some potential drawbacks to consider:
- Premiums: 90% silver coins often come with a premium, which can range from 10% to 30% above their melt value.
- Condition: The condition of the coin can significantly impact its value. Coins that are worn or damaged may be worth less than those that are in good condition.
- Authenticity: Counterfeit coins are a risk, so it’s essential to purchase from reputable dealers.
- Storage: 90% silver coins require proper storage to maintain their condition and prevent damage.
How to Invest in 90% Silver Coins
If you’re interested in investing in 90% silver coins, here are some steps to follow:
Research and Due Diligence
Before investing in 90% silver coins, it’s essential to do your research and due diligence. This includes:
- Learning about the coins: Understand the history, mintage, and characteristics of the coins you’re interested in.
- Checking the market: Keep an eye on market trends and prices to ensure you’re getting a fair deal.
- Finding a reputable dealer: Purchase from a reputable dealer to minimize the risk of counterfeit coins.
Purchasing 90% Silver Coins
Once you’ve done your research, you can start purchasing 90% silver coins. You can buy coins from:
- Coin shops: Local coin shops often carry a selection of 90% silver coins.
- Online dealers: Online dealers like APMEX, JM Bullion, and SD Bullion offer a wide selection of 90% silver coins.
- Auctions: You can also find 90% silver coins at auctions, both online and offline.
Storing Your 90% Silver Coins
Proper storage is essential to maintain the condition and value of your 90% silver coins. You can store your coins in:
- Coin albums: Coin albums are a great way to store and display your coins.
- Coin folders: Coin folders are another option for storing your coins.
- Safety deposit boxes: If you have a large collection, consider storing your coins in a safety deposit box.
Tax Implications of Investing in 90% Silver Coins
Investing in 90% silver coins can have tax implications. Here are some key points to consider:
- Capital gains tax: If you sell your 90% silver coins for a profit, you may be subject to capital gains tax.
- Reporting requirements: You may need to report your 90% silver coin transactions to the IRS.
- Tax deductions: You may be able to deduct losses on your 90% silver coin investments.
It’s essential to consult with a tax professional to understand the tax implications of investing in 90% silver coins.
Conclusion
Investing in 90% silver coins can be a good strategy for diversifying your portfolio and hedging against inflation. However, it’s essential to do your research, understand the benefits and drawbacks, and consider the tax implications. By following the steps outlined in this article, you can make an informed decision and start investing in 90% silver coins.
| Coin | Mintage | Silver Content |
|---|---|---|
| Morgan dollar | 657 million | 90% |
| Peace dollar | 111 million | 90% |
| Walking Liberty half-dollar | 485 million | 90% |
| Franklin half-dollar | 465 million | 90% |
| Kennedy half-dollar | 430 million | 90% |
Note: The mintage figures are approximate and sourced from the United States Mint.
What are 90% silver coins and how are they different from other coins?
90% silver coins are a type of coin that contains 90% silver and 10% copper. They were minted in the United States from 1794 to 1964 and are highly sought after by collectors and investors due to their high silver content. These coins are different from other coins in that they have a higher silver content than most modern coins, which are typically made of base metals such as copper and nickel.
The high silver content of 90% silver coins makes them a popular choice for investors who are looking to diversify their portfolio with precious metals. Additionally, these coins are often more affordable than pure silver coins, making them a more accessible option for those who are new to investing in precious metals.
What are the benefits of investing in 90% silver coins?
Investing in 90% silver coins can provide a number of benefits, including diversification, potential for long-term growth, and a hedge against inflation. The value of silver has historically been less volatile than other precious metals, making it a more stable investment option. Additionally, 90% silver coins are often more affordable than pure silver coins, making them a more accessible option for those who are new to investing in precious metals.
Another benefit of investing in 90% silver coins is that they can be easily bought and sold. Many coin dealers and online marketplaces buy and sell 90% silver coins, making it easy to liquidate your investment if needed. Additionally, the value of 90% silver coins is widely recognized, making it easy to determine their value.
What are the risks associated with investing in 90% silver coins?
As with any investment, there are risks associated with investing in 90% silver coins. One of the main risks is that the value of silver can fluctuate, which can affect the value of your investment. Additionally, the condition and rarity of the coin can also impact its value, so it’s essential to have your coins graded and certified by a reputable third-party service.
Another risk associated with investing in 90% silver coins is that they can be counterfeit. To avoid this risk, it’s essential to buy from reputable dealers and to have your coins authenticated by a reputable third-party service. Additionally, it’s essential to keep your coins in a safe and secure location to protect them from theft or loss.
How do I get started with investing in 90% silver coins?
Getting started with investing in 90% silver coins is relatively easy. The first step is to determine your budget and investment goals. From there, you can start researching different types of 90% silver coins and their values. You can also consider consulting with a financial advisor or a reputable coin dealer to help you make informed investment decisions.
Once you’ve determined which coins you’re interested in investing in, you can start buying them from reputable dealers or online marketplaces. It’s essential to make sure that you’re buying from a reputable source to avoid counterfeit coins. Additionally, it’s essential to keep your coins in a safe and secure location to protect them from theft or loss.
How do I store and protect my 90% silver coins?
Proper storage and protection are essential to maintaining the value and condition of your 90% silver coins. One of the best ways to store your coins is in a cool, dry place, such as a safe or a safety deposit box. You can also consider storing your coins in a protective album or folder to prevent scratching and damage.
It’s also essential to handle your coins carefully to prevent damage. You should always handle your coins by the edges, rather than touching the surface, to prevent oils from your skin from damaging the coin. Additionally, you should avoid exposing your coins to extreme temperatures or humidity, as this can cause damage or discoloration.
Can I use 90% silver coins as a form of currency?
While 90% silver coins are technically legal tender, they are not commonly accepted as a form of currency. In fact, most businesses will not accept 90% silver coins as payment, and they are generally not recognized as a form of currency by financial institutions.
However, 90% silver coins can be easily sold or traded for cash or other forms of currency. Many coin dealers and online marketplaces buy and sell 90% silver coins, making it easy to liquidate your investment if needed. Additionally, the value of 90% silver coins is widely recognized, making it easy to determine their value.
Are 90% silver coins a good investment for beginners?
90% silver coins can be a good investment for beginners, but it’s essential to do your research and understand the market before investing. One of the benefits of investing in 90% silver coins is that they are often more affordable than pure silver coins, making them a more accessible option for those who are new to investing in precious metals.
However, it’s essential to keep in mind that investing in 90% silver coins can be complex, and there are risks associated with investing in any type of asset. To minimize these risks, it’s essential to buy from reputable dealers, have your coins graded and certified by a reputable third-party service, and to keep your coins in a safe and secure location.