Morgan Silver Dollars were originally minted as currency in the late 19th century but have remained a popular investment vehicle for exposure to silver. But are these silver dollars really worth investing in and if so, how much return can you expect?
Buying Morgan Silver Dollars is not an investment. Although their value might increase as the price of silver climbs, they are – like all precious metals – a non-productive asset. Owning Morgan Silver Dollars is only worth it as a hedge against inflation or systemic risk.
In this article, we will in a bit more detail whether investing in Morgan Silver Dollars is worth it. I will cover whether these silver dollars go up in value if owning them can constitute an investment, and highlight other ways to gain exposure to the silver market.
Do Morgan Dollars increase in value?
As Morgan Silver Dollars are minted from pure silver, their increase or decrease in value is highly correlated with the price of silver itself. Thus, as the demand and price of silver increase, so does the value of Morgan Dollars.
However, there is another way by which Morgan Dollars might increase in value uncorrelated to the base metal itself: collector’s value.
Not only are Morgan Dollars used to effectively own and store silver but they also become – in some cases rare – collector’s items that vary in value depending on their condition and uniqueness.
While this value increase is difficult to quantify over time, owning the right Morgan Silver Dollar at the right time can certainly pay off as prices of more than $70,000 have been reported for the rarest of coins.
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Are Morgan Silver Dollars a good investment?
As mentioned in the introductory paragraph Morgan Dollars can not be considered an investment at all in the traditional sense, hence, they cannot be a good or bad investment. Rather buying Morgan Dollars is a speculative purchase.
But even though buying silver coins may be speculative in nature, that does not mean that there is no value to it.
A good way to think about investing in Morgan Dollars is as a hedge against dollar inflation and an insurance policy against the financial system. Should the dollar inflate to unknown heights and the traditional financial system of debts and liabilities collapse, precious metals – including Morgan Dollars – will become a safe haven and a store of value.
Why Morgan Silver Dollars are not an investment
The key characteristic to consider when determining whether an asset is an investment at all is its productive capability. Productive assets create ongoing income for the investor. In the case of stocks that income is dividends, in the case of real estate, it is rental income.
Morgan Dollars – and all precious metals for that matter – do not produce any investor income. The only way to make a profit from buying Morgan Silver Dollars is to sell them to someone else at a higher price than you paid. This is the key feature of a speculative asset.
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A better way to invest in silver
While purchasing Morgan Dollars is one way to get exposure to the silver market there also are alternative ways that can truly be considered investments. The way to go about this is to own part of the silver industry and its related sectors.
This could entail owning shares of silver mining companies directly or buying stocks of related industries, such as logistics companies that transport silver. And there are even several ETFs out there that allow you to own a part of every major silver producer while diversifying your risk!
It is, however, important to point out that while this would also constitute an investment in the traditional sense of the word it does not mitigate the risk of a financial system collapse. While this scenario seems unlikely, it is of course not impossible.
With that said, Morgan Silver Dollars can be an excellent insurance policy as such. Just always make sure that you are aware whether you are actually investing, speculating, or taking out insurance.
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