May 17, 2012

SILVER: +/-0%

TWITTER YOUTUBE FACEBOOK RSS

Silver Terms and Meanings

 

 

 

 

 

 

Silver investing is relatively straightforward (as much as any investing is), but the terminology can be very mystifying! If you are researching silver as an investment, it is very easy to get intimidated by the terms, which is why we’re here to help. This category lists some of the common questions, and we have also delved in deeper and have some articles and explanations on the most common terms and phrases.

Common Terms in Silver Investing

Commemorative Coin: A coin minted to memorialize an event, such as the 9/11 silver coins. Their value is largely that of the collectible.

COMEX: One of the most major stock companies trading in gold and silver future contracts. If you are interested in future contracts, you will probably deal with COMEX.

ETF: Exchange-Traded Fund. This is where you invest in raw silver on paper, not buy the actual silver and hold it. It’s an easy way to invest in silver without needing to find a home for it.

Fineness: The purity of the silver. The finer the silver is, the purer it will be. Keep in mind that all silver has trace amounts of something else, so the finest silver will be is .999 or 99.9%.

Future Contracts (Silver): A gamble whereby you bet on the future price of silver. It is a high risk venture and most people end up losing money.

Hedge: A hedge investment is an investment which is made in order to protect some fraction of the investor’s money. Silver is often considered a hedge investment.

Morgan Dollar/Coin: A rare and broad type of silver coin which was minted between 1878 and 1921 with different kinds of coins made in all five major locations. They are very collectible with the rarest coins worth a ton of money.

PCGS: Professional Coin Grading Service. If your coin has been graded by this premier service, you can bet your silver dollar it’s been graded by one of the best.

Silver Bullions: A silver bar

Silver coins: Old forms of currency now turned to investment and collectibles. The last silver coins were discontinued in 1970.

Silver Eagle: 1oz round silver bullions. They are very common online.

Silver Spot: The price a buyer is willing to pay right away for silver.

Silver Rounds: A chunk of silver that has been rounded into a medallion. It’s not a coin!

Troy Ounce: Troy ounces are the main measurement of precious metals, dating back to the 5th century! Troy ounces are about 31.1 grams or 1.09 conventional ounces. Troy ounces were kept for dealing with metals so that the old levels of standardization would be maintained.

Of course, this glossary of terms is only the more basic and prevalent terms that will come up in your search for silver investments and there will be more added as it comes up!

Silver FAQ:

Why Should I Invest in Silver?
Silver is considered a Hedge Investment; it’s a relatively stable and easy to keep track of investment that can protect some of your money from a volatile market.

Silver coins, Bullions or Certificates?
It’s totally up to you. Amateurs are best of with bullions or coins, collectors love coins and professionals prefer certificates or even future stocks. But it depends wildly on your comfort level.

Is there a manufacturer to pick over all?
Not really. Big names include the Canadian Royal Mint, Engelhard or Johnson Matthey. Choosing well known manufacturers is advantageous because you know you won’t get cheated and it will be easier to liquidate your stock, but otherwise, the company you choose is up to you.

Where can I sell my silver?
Anywhere really. In New Zealand, it’s GST exempt.

Which is Safest?
Probably bullions for investing. Silver bars are a tangible proof of investment and are easy to keep track of. However, ETFs are more convenient.

What is the Grade of a Silver Coin?
When buying and selling silver coins, you will hear a lot about its ‘Grade’. The grade of a silver coin is the condition that the coin is in when you try to buy it or sell it. The better the condition, the more the coin is worth with the best grade being Extra Fine for circulated coins (you can clearly see at least 90% of the original design) and Brilliant Uncirculated (100% design seen + Luster). Most tradable coins are Fine (50% design) or Very Fine (75%) before they are worth any appreciable amount of money.

What is the Silver Melt Value?
If you are looking at the value of a coin, you will see two values: Silver melt and intrinsic. The Intrinsic value reflects intangibles, such as how much silver is being mined, how expensive it was to mine and how nice the design is and how rare the coin is. The silver melt value is how much the coin would be worth if you melted it down. Generally the silver melt value of a coin is only a couple of dollars, though a few coins go as high as $25.00.

What is the Mint Mark?
The mint mark is the mark on the coin denoting where it was minted. Typical mint marks are:

D for Denver
S for San Francisco
O for New Orleans
P or unmarked for Philadelphia.

Some coins are worth more depending on where they were minted because of lower mints. The mint mark is almost always found under the tail feathers of the heraldic eagle.

More will be added as they come up; FAQs are an ever evolving thing! Don’t forget to check out our detailed articles that delve deeper into some of these terms and give detailed explanations. Feel free to contact us if you have any questions.