What Silver Should I Buy?

Posted by Micah Miller on

One of the most common questions new silver stackers have is, "what kind of silver should I buy?"

While this answer might be different for each person, Freedom Standard Metals believes that there is a right and a wrong way to accumulate silver.

 
When you first get started stacking silver, it's very easy to be distracted by the rare numismatic coins. There is nothing wrong with collecting numismatics, but if you don't have a specialty in understanding the different coins, mints, years, and errors, it's very easy for you to overpay per ounce.

There are two main concerns you should have: premium per ounce and liquidity.

Silver Premiums - Pay Attention to Premium Per Ounce!

If you haven't already realized, premium is the price you pay per ounce of silver over the global spot price. Premiums are applied to account for buy demand, and to make up for the general inefficiencies, and manipulation of the spot market.

Depending on market conditions, premiums fluctuate. But, certain items will always carry a higher premium than others.

For example, a generic 1 ounce silver bullion round always has a lower premium than a silver eagle from the US Mint.

If your goal was to stack the maximum amount of silver, you would go after the item with the lowest premium over spot - which would be the one ounce silver round.

Liquidity - What Type of Silver Sells The Fastest?

Liquidity is the speed at which you can buy or sell an asset. In general, the silver market is extremely liquid. This is due to the massive increase in demand over the past year, but even during cooler markets, you can almost always bank on being able to cash in your silver with a local dealer.

What gives you a liquidity edge is correlated with the recognition of your silver. If you have generic silver, some dealers may not be as interested if they have an oversupply of silver inventory.

Silver Eagles and other government minted coins however, typically have excellent liquidity. Since silver eagles are more recognizable by dealers and their customers, and qualify as investment-grade bullion, you will more likely be able to sell them quickly.