The Differences Between Numismatic and Bullion Coins
With precious metals prices as they are many people are feeling very down about their investment. Increasingly I am getting the question “what is the difference between a bullion and a numismatic coin?”
This is a great questions and while many in the precious metals sector implore people to either buy strictly numismatic or strictly bullion, the truth is, as with any investment, strategic diversification is key.
While numismatic coins have received a bad reputation mainly because of dishonest dealers and ignorant customers, many who have purchased these coins have done quite well. The coins have held their premiums much better than bullion coins.
Bullion coins are the more popular bet when it comes to investment and inflation protection. Here are some examples of bullion coins:
- U.S. Gold Eagles
- Canadian Gold Maples
- U.S. Silver Eagles
- Canadian Silver Maples
- South African Krugerrands
- 90% Junk Silver (pre-1965 half-dollars, quarters, dimes, etc…)
Semi-numismatic and numismatic coins are collectible coins and they are no longer produced. In many cases they are somewhat rare and are priced for this rarity and not just the bullion content.
Examples of numismatic coins:
- Pre-1933 $20, $10 Eagle coins
- Peace Silver Dollars
- Swiss 20 Francs
- British Sovereigns
Precious metals broker, Don Stott, draws a poignant comparison:
Let’s say you need to drive from Florida to California – at least a 2000 mile trek – and you have the choice of a Model-T Ford or a brand new Cadillac.
While the Model-T is an impressive, beautiful car, it also hails from a bygone era. Indeed, there are only two forward gears and it doesn’t go all that fast. While it would make a great show-car in a parade, it isn’t prepared for your arduous journey.
Numismatics are like the Model-T. Great if you have a nice basis in bullion already. They are a more nuanced investment and with some due diligence