Nowadays, a lot of investors and individuals alike are focusing a portion of their investments into precious metals. The main reason is that precious metals, such as gold and silver are a hedge against inflation, and they will always hold a significant value. Simply put, investing in precious metals is a way to secure an investment against the volatility of other investments, such as stocks, bonds and real estate.
The most popular means of investing in precious metals is acquiring coins made of gold or silver, otherwise known as bullions. For other people, these investments hold a bit more significance, as they invest in numismatic coins that oftentimes have premiums added to their value, such as significance, historical value, rarity and such. As for the people that are new to this kind of investment, the question begs whether to opt for bullions or numismatic coins. Here are a few things you should know about both before you start investing.
As mentioned before, bullions are coins made of gold and silver. They’re minted in such a way to contain as much precious metal they’re made of as possible. In most cases, coins have 99.99% purity, which is why they have numbers, such as .999 or .9999 on them. What’s more 100% purity is next to impossible to achieve. Now, the coin value is close to spot value of the precious metal price they’re made of. On the other hand, numismatic coins have added premiums to their scrap value.
These premiums oftentimes go for 25% higher value but can also sometimes reach even thousands of percent more. The price varies depending on the rarity of the coin, its condition and the demand for it. In summary, bullions always hold their inherent value and there’s always a demand for them, due to the metals they contain, while numismatic coin value varies based on its premiums and how much people are willing to pay for them.
Choosing either bullions or numismatic coins as your investment highly depends on what you want from your investment in the first place. If you’re planning to secure your funds for later use and ensure that the global economy and inflation won’t affect it much, then bullions are the right way to go. You can also invest in bullions as means of inheritance for your children.
As for valuable numismatic coins, they can prove to be a considerable return on investment, especially if you possess a truly rare coin that is highly sought after by collectors. In addition, purchasing a numismatic coin can be a good long-term investment, especially since their value may increase over time or if the demand for them goes up.
Owning precious metals in form of coins is a good and solid investment. However, when opting for either bullions or numismatic coins, there are always risks involved. The main risk of owning bullions is that every time gold and silver prices go down the value of your bullions will go down as well. If you need to cash in on your investment, you need to consider the market price for your bullions before you do so. On the other hand, numismatic coins require more precision and knowledge to handle.
If you don’t have any knowledge about the origin of numismatic coins, their significance and historical reference, as well as their rarity, you might end up overpaying for them. What’s more you can easily purchase a fake coin that has no value to collectors at all. The fact of the matter is that valuable numismatic coins require special care. If you’re looking to become a collector or a hobbyist, you’ll need to conduct extensive research beforehand.
Cashing in on your investment
One of the main concerns for new investors, is how can they cash in on their investment for either bullions or numismatic coins. As mentioned before, there’s always a high demand for gold and silver bullions. The main reason is that the precious metals they contain, such as gold and silver, have their use in various industries, so they’ll always be sought after.
As far as numismatic coins go, they may be a bit harder to cash in on. It may be difficult to find the right person who’s willing to buy or pay their intended price. Also, based on their quality and rarity, the current demand may lower their price than what you intend to sell, so you may have to wait for some time until interest goes up.
Deciding to invest in precious metals is always a good idea, as well as a good opportunity to secure funds and even gain profits. However, whether you will choose numismatic coins or bullions for your investment depends on your motives and future goals.