Home >> Why Invest In Copper Bars and Coins?

©iStockphoto.com – monomov

This site is all about precious metals with a heavy focus on my favorite metal, gold. Today, I'm going to do something a little different and take a look at a non precious metal which has been appreciating in value quite rapidly, copper. The picture to the left is a large stash of copper bars. Copper is a common metal and is used in many applications including gutters, wire, and pennies. However, demand currently exceeds supply and the US dollar is under a lot of pressure, forcing the price of copper to new heights.

Copper Pennies Are Worth 2 Cents

A very interesting fact: All pennies before 1982 (and some produced in 1982) are primarily composed of copper. All pennies after 1982 (and some produced in 1982) are only coated in copper. The reason for this is copper is worth more than the face value of the penny itself. According to Coinflation, the current value of a pre-1982 copper penny is over 2 cents. What does this mean to the metals investor? First, it indicates you should hoard all of your pre-1982 pennies. You get instant and free 100 percent appreciation by holding onto your copper pennies. Second, it may make sense to buy some copper pennies and bars. More as a hobby than anything else, I have brought home some $25 dollar boxes of pennies from the bank and sort through them by hand to pull out the pre-1982 pennies for investment. This is a cheap and fun weekend hobby. One guy has taken this hobby to the next level and has developed a copper penny sorting machine which sorts the copper pennies from the non-copper ones. If I had a garage, I would probably buy this because it's a great tool to sort through tons of pennies and get instant appreciation. If you are interested in investing in copper pennies, you'll want to get started immediately. Gresham's law states that bad money drives good money out of existence. In this case, the old pre-1982 pennies are "good" money and the post-1982 pennies are "bad" money. As more and more investors start hoarding copper pennies, there will be none left. How many silver dimes, nickels, quarters, and half dollars are in circulation today? Almost none. This is Gresham's law in action. The good news: You're still ahead of the curve and have time to start investing in copper pennies.

Copper Bullion Bars From Jetco Minting

Another way to invest in copper: A United States mining company called Jetco Minting is selling a variety of copper bullion bars on Ebay. To see Jetco's Ebay store, take a look at the Ebay widget on the left. As with anything, there are pros and cons with this investment method. Let's start with the pros. I am amazed with the quality and variety of bullion bars that Jetco provides. If you are a serious investor, Jetco provides a very easy way to accumulate a large position in copper bullion. The bars also make great gifts since they are very good looking. Moreover, copper bullion bars are much easier to sort through, store, and trade than pennies. Given that a sizeable position in copper takes up a lot more space than gold or silver, it makes sense to own bars rather than coins. The main downside of purchasing the bars is they do not provide a discount to current bullion value of copper. You will pay the current value of copper. With pennies, however, you can accumulate them for their face value and realize an immediate 100 percent return. That is arbitrage at its best! Given all of these facts, perhaps a hybrid investment solution makes the most sense. Accumulate some Jetco bars and also some pennies.

Copper Bullion Bars From E Cohen Mint

In addition to the Jetco, E Cohen Mint is another popular source of copper bullion bars. You can visit the Cohen Mint website to purchase a variety of bullion products including gold, silver, and of course copper. I really like the Cohen Mint because they offer a lot of niche bullion products not available anywhere else, especially if you are looking for bullion in small quantities. For example, they offer 1 troy grain cold coins, the smallest gold bullion coins available anywhere. They also offer one ounce copper bullion bars. I have written a review of E Cohen Mint. Most recently, I have had the absolute privilege of interviewing E Cohen Mint, you'll want to check out the interview for sure (it's one of the most interesting an thorough articles on this site).

Should I Really Invest in Copper?

When I first started writing this article, I was investing in copper as a hobby. Copper is not a precious metal and there is a lot of it in the ground. Over time, I expect the dollar to be weak and copper will likely continue to do well. There are much better alternatives: gold, silver, platinum, and palladium. Collecting a sizeable copper position would take up a huge amount of space and be impossible to transport. However, a lifetime of wealth can fit in just a handful of gold coins. At the same time, I think this is a very unique time for the copper investor. You can buy copper for a 50 percent discount to its fair metal value. There are very few cases where you can be guaranteed 100 percent price appreciation with no risk. Even better, as copper continues to appreciate, you will make even more money. Moreover, copper is not in the news. As a contrarian investor at heart, I know that the best investments are the ones that nobody knows about. Ten or twenty years from now, those who did not invest in copper will be very disappointed. If you think about the long term and take advantage of this historical moment (how much would you give to be able to go back and accumulate silver US coins for their face value?), I think it definitely makes sense to accumulate a position in copper bullion. Do I like it better than gold and silver? Definitely not. I am a gold bug at heart and there are many articles on this site illustrating the reasons for my attraction to gold. At the same time, as a prudent investor, I cannot deny the opportunity in copper bullion and pennies and will definitely carve out a portion of my investment portfolio for more copper in the coming years. If you are interested in learning more about investing in copper pennies and bars, there is a community of copper investors over at Real Cent. Fun place to go to get the opinion of others and how they're investing in copper.

Shares of Stock in Copper Mining Companies

©iStockphoto.com – achococat

I also wanted to present two other different ways to invest in the rising price of copper. The first is buying shares in copper mining companies. The benefit of this route is you don't need to store the copper yourself. While it's easy to place gold and silver bullion in your safe deposit box, copper is just too big. If you buy shares in copper mining companies, the barrier of storing copper is removed. The downside to this option is many copper companies have rallied quite a bit. This creates risk where there is no risk in buying copper pennies at a 50 percent discount to their metal value. If you decide to investigate copper mining companies, the same principals of investing in gold mining companies apply.

Copper Wheat Pennies - Numismatics?

The image to the right is an old US wheat penny. Wheat pennies are copper pennies that contain a wheat emblem on the reverse as pictured. In your quest to accumulate copper pennies, you will definitely pick up a few of these wheat pennies. While not that many people are giving them much thought today, I expect them to be more and more rare over time. As you accumulate wheat pennies, put them in a special place apart from your regular copper bullion coins. Wheat pennies may some day be worth even more due to a potential rise in numismatic value. Numismatics is the area of coin investing that gets into rare coins. Rare numismatic coins trade at a premium due to their rare collector value. One of my great hopes is that I accumulate some bullion coins for their metal value that eventually turn out to also be numismatics. Wheat pennies are a case where this might turn out to be true! Also of interest in the world of wheat pennies is We Buy Pennies. The webmaster of this site is on a quest to purchase as many wheat pennies as possible. If you have some wheat pennies (or any other coins) you are interested in selling, this is a great site to check out. They are able to give some good deals and the site owner is really great.

Copper Is Money

I hate to close on a negative note, but we should definitely consider the doomsday scenario. The US dollar continues to erode in value. All fiat currencies come to an end at some point. When they do, objects of value are used to make purchases, namely gold, silver, and copper. The problem with gold and silver is they are worth too much. A one ounce gold bullion coin is currently worth over $900. What if the US dollar is worthless but I need to make a purchase that costs $5 in today's dollar terms? While gold and silver will be worth too much, copper is the ideal candidate for smaller purchases. While I certainly hope this doomsday scenario does not materialize, it illustrates just one more reason to complement your precious metals portfolio with copper, a very neat base metal that will gain exponentially more interest over the upcoming years.

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