If you are thinking of investing in precious metals, you are definitely on the right tract. Considering we live in an era where there are lots of stock market bubbles and equities bubbles, it is very easy to get caught in the hype of the stock market. It is very easy to buy into all false euphoria about the economy. The reality is that the stock market can only go up so high before it crashes down unless it is supported by underlying help of the US economy or global economy. Sadly, this is not the case. Economic recovery is quite uneven. In fact, the United States economic recovery is quite slow, it is a very soft economy. There are many people, especially young people right out of college who cannot get jobs. There are millions and millions of Americans that cannot get gainful employment. This can all come back to hunt the US stock market if gets ahead of itself.
The US stock market historically has gone through periods where it appreciates so much in value due to speculation when there is really nothing holding up those values. The most recent example of this is dot com crash of 2001. During this crash there were lots of technology companies that became public companies, but they did not earn any money, they were not generating any profits. People were just basically buying and selling these stocks because they know that somebody else would buy them at a higher price. Obviously, this can only go on for so long. The other should drop in 2001 when people started realizing that “hey, wait a minute, we are trading empty stocks. We are trading stuff that really has no value.” Once this wake-up call reaches traders in the stock market, the shoe will drop, the stock market will crash. It is all about being realistic. It is all about stock prices becoming aligned with underlying economic reality that stocks are supposed to reflect. Unfortunately, with huge price earnings ratios, huge evaluations and crazy prices of technology stocks like Twitter and Facebook, we are really in the middle of another bubble economy. Unless, the US economy starts recovering dramatically and starts posting significant gains and the stock market is just poising itself for a dramatic crash. Why should you care about this? What does this have to do with silver proof coins? Simple, people who are playing stock market should always diversify their portfolio with precious metals, real estate or other forms of investments that can protect them against market crashes and high levels of inflation.
One of the best places to apart a portion of your investment portfolio is in precious metals. However, it is a good idea to diversify within your diversification strategy. It is not enough that you devoted a portion of your portfolio to silver, gold and platinum, you must also diversify within that portfolio. For example, in your silver portfolio, invest in silver proof coins, silver mining stocks and other silver related investment options. Do not just invest in physical silver or silver bullion. Silver proof coin is a great investment vehicle for the following reasons.
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Silver proof coins are proof coins. Proof coins are coins that are being manufactured in a very special way by the US government. Normally, to create coins that enter circulation, the minting office would stamp a piece of metal once. With silver proof coins, metal is struck twice. What is the big deal? Well, the deal is that this creates a higher amount of detail, these are better looking silver coins. Even if you have silver coins that are in mint condition, they do not hold the candle to silver proof coins. The lines are crisper, it almost seems like 3D, design really stands out. There is a high level of detail in silver proof coins due to their double strike manufacturing process. As you can already tell, such high levels of detail increase their appeal to collectors.
It is very rare to find silver coins now. In 1964, the US government stopped minting silver coins. And thanks to the run up in silver prices, lots of people started hoarding silver coins. Because of this hoarding and because of this collector’s mania, there is such a high demand for silver coins. On top of this demand, silver proof coins brings another factor to the table. Silver proof coins are proof coins, by definition they are rare because not all coins created by the US government are proof coins. In fact, the vast majority are not proof coins. It cost the US government more money to double strike particular piece of metal to make a coin. You can bank on these two sources of rarity to gain some measure of confidence that your investment in silver proof coins will increase with time.
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Silver proof coins also have grades like mint, good and fair. This is important to know because one silver proof coin is not equal to another silver proof coin. They have to have the same condition. Knowing this can help you make right investment decisions. Obviously, silver proof coins that are in the right shape and condition are the ones that would tend to appreciate better.
When you diversify part of your portfolio whether you are using a self-directed IRA or some other means, you have to remember that silver proof coins and investing in collectibles in general offers you two ways to beat the market. One is you hedge the value of your investment by investing in coins that have precious metals in it. By investing in gold coins or silver coins, you are hoping that the value of precious metal would increase with time. The more it increases, the more valuable your particular collectible is. Investing in silver proof coin however, maximizes the collector’s value component of precious metal coins investments. Not only are you investing in precious metals by investing in silver proof coins or gold coins, you are also investing in collector's value of those coins. This is another source of value. So if you think your silver proof coins are already rising in value because of the silver they contain, they are also getting boosted by the fact that they are rare. There are a huge number of collectors that would want to buy them. Put these two together and include the fact that silver proof coins are proof coins and you have three sources of rarity. This can only help you in your investment strategy.
Protect yourself against economic uncertainty, market crashes and inflation by investing in silver proof coins. Silver proof coins have three sources of value. Not only do they contain valuable silver, which tends to go up during periods of high inflation and economic uncertainty, but they are also collectors' items. The great thing about silver proof coins is that they are collectors' items twice over. There are silver coins which are already collectibles, but there are also proof coins which adds to their overall collector’s appeal.