Is it Time to Sell Silver?

With commodity prices shooting upwards, you may have lately been tempted to start collecting your silver trays, urns, earrings, good silverware, and anything else you can lay your hands on and head to the closest pawn shop. With the great run silver is on, I know I've been tempted on more than one occasion to take some rolls of pre-1965 Washington quarters and Roosevelt dimes (they are 90% silver, 10% copper) I own over to the local coin shop.

At the writing of this article, prices are close to 30 year highs, and this means it's definitely hard to resist the temptation to sell. But will prices go higher? Will they soon begin to tumble back to the levels of previous years? Such questions can leave you wondering, is it time to sell your silver?

A Good Hedge

I've been a fan of silver ever since I was a youngster when my uncle used to give me one-ounce silver bars and coins as gifts when he would visit. Silver can be a great hedge against inflation, a falling dollar, various disaster scenarios, and can help diversify your portfolio. Silver can be tucked away in a safe-deposit box or shoe box and left to rise and fall in value over time, and if or when you decide to cash in, if you do it in the right way, there may not be much in the way of value lost to commissions or fees.

Better Than Gold?

Personally, I like silver better than gold. It's a more accessible investment option for a large portion of the population since many of us don't have $1400 dollars just sitting around to lay out for an ounce of gold.

I remember once reading a book that was about what you should do if you ever came into a large amount of money. It noted that it would be a wise decision to invest a portion of your money in silver coins. The author's logic behind this advice was that should hyperinflation hit (ala Germany post WWI) and it takes a wheelbarrow full of paper money to buy a loaf of bread, commodities such as silver, gold, nickel, etc. would still be accepted forms of currency with better value retention. However, it would be much easier to go out and buy a loaf of bread with a single 90% silver dime than have to figure out how to break a gold coin worth thirty or forty times as much. This advice always stuck with me and with inflation now on the rise and the dollar falling, I'm glad it did.

So When Do You Sell?

Personally, I don't like to sell silver, even with prices as high as they are. I don't need the money at the moment and with the economy going the way it is, I don't think silver prices aren't going to drop much any time soon. Even if they do, my silver will one day be a nice thing to pass along to my son. And like I said, I enjoy the security silver provides against hyperinflation.

But if you're in dire straits and are in need of cash or are going to use the proceeds to pay off high interest debt, selling your silver might be a consideration. Or you could look at the sale of silver like the sale of stocks and do a little profit taking. If I was going to sell, this is how I would do it.

By selling off enough of the silver to cover my initial costs while prices are high, I'd be sure not to lose anything on the deal, while at the same time, I could still hold on to some of my investment in case prices continue to rise. If prices drop after my initial sale, I could reinvest some or all of my profits back into silver if I felt like it in hopes of a recovery.

Selling Silver

It isn't as hard as you might think to find buyers for silver, and it can pay to shop around and get a couple of quotes before handing over your treasured goods. Consider visiting coinflation.com to become better educated as to what the melt values are for various silver content coins. Places like eBay stores , pawn shops or those well-known gold and silver buyback operations can take huge cuts of your profits through hefty commissions and fees which can often range into the 40-50% range or more.

The local coin shop can be a good place to start looking to sell your silver coins, but make sure you know what your silver is worth to prevent begin taken advantage of or making a poor deal. Surprisingly enough, another good place to buy or sell silver or just learn what the going rate for silver may be eBay (online, not the store). Here you can get a good feel for what a variety of coins, silver bars, and other forms of silver are selling for and see what people are actually paying for silver, not just what the market is currently quoting -- there is often a difference.

More From This Contributor:

How I Fight Inflation

5 Ways to Fight Rising Food Costs

The Value of Multiple Income Streams

Disclaimer:

The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. For financial advice, readers should consult a licensed financial advisor. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.