Questions about owning silver

[Mahkato]

Other than the fact that it physically takes up a lot more space than equally-valued gold, are there any disadvantages to owning silver?
Is it harder to sell or trade silver than gold?
Does it decrease in value over time as it tarnishes?
Does handling it with bare hands cause problems?
How should it be stored?
Are bars or coins any different in value retention, or should I just focus on getting the most silver for the least number of FRNs I can?
For bars, does the name of the producer (Engelhard, Johnson Matthey) make a difference, or are the "off-brands" just as good?
Is it better to have 100 one-ounce bars, 10 ten-ounce bars, or 1 hundred-ounce bar?


Thanks for your help.

[SevenEyedJeff]

I personally like the pre-1965 silver coins. They are priced at pretty much melt value, so it's nice to get the silver without having to pay a premium. The condition doesn't really matter too much, and it gets the job done. If you decide to sell (which I don't plan on doing until I've used up all my paper dollars) these junk silver coins have a smaller spread than, say, American eagles. I talked to my local coin shop and he gave me the buy and sell for these two:

Junk Silver Buy At Spot minus 4% Sell At Spot or slightly below

American eagle Buy At Spot plus $ 1 Sell At Spot plus $ 2.50

So The spread on the junk silver is about 3-4% and on the Eagle about 9%. Yes the Eagle looks nicer, but in terms of how much silver you get and highest resale value, I think the pre-1965 coins work best. My coin shop was low on these coins one time when I went and he gave me a few nice looking ones that are worth a bit more because of rarity, some were 1890s and early 1900s, and didn't even charge me over spot which was nice.

As far as storing, how about a fire proof safe, or safe deposit box, or both? There are those who fear government confiscation of deposit boxes if they make metals illegal like FDR did in the 1930s, but exactly what to do to store them is up to you. If you have a big backyard, maybe bury it in the ground.

Oh, one other thing. The smaller denomination of the junk silver might allow you to say buy a loaf of bread for a quarter worth $ 3, whereas if you have an eagle or a 10 oz bar, might be difficult to buy small items if the seller doesn't have change.

[tmosley]

Also, if you use bullion, there is no need to worry about loss of value due to tarnishing or handling. In the event of a fire, so long as you can find the remains, they will be worth the same amount (I keep mine in a fire safe so I don't need to get it assayed again in the even of a fire).

I personally don't like coins (the exception being junk silver, which is great). The numismatic values are totally arbitrary and based on who you can sell it to. If the dealer who buys it from you grades it as VF, when it is really AU (and he sells it as such), you get shafted--bad. I personally would always go for the most silver for the money, but from a reputable dealer or service.

[bander87]

I can't think of any disadvantages. If anything, silver is more advantageous because there is an industrial demand for it.

I think they are both easily sold. Maybe silver can be more easily sold because people can afford it more.

I know with the pre 1965 coins, they have a lot of wear due to circulation. Sometimes as much as 10% of the silver content can be gone - but you just gotta weigh them. Silver rounds and other forms of silver are not circulated, so you don't have to worry about this problem too much. Bare hands are fine.

When it comes to storage, the less silver that is exposed to open air, the better. Store them in plastic covers or baggies. Storing them in a fireproof safe box isn't a bad idea. You can get these for 20-50 bucks at wallmart depending on the size.

You should always diversify your silver. If you have 100 total ounces, I would not want just one 100 ounce bar. For example, I would maybe have six 10 ounce bars and the rest in 1 ounce rounds and bars. Keep in mind, you get more for your money with bigger amounts, but you have to sell the whole thing at once.

Top brands are more trusted and recognized, so they are a little better, but I wouldn't say they are worth really any more. Silver is silver is silver.... as long as people can tell it's silver :P

[Trance Dance Master]

are there any disadvantages to owning silver?Yes. Your wealth will make some people jealous.:p