Gold/Silver bullion question.

Retirement account fully funded? 401(k) Roth IRA? The sooner you start that up the better.

 

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Given age and time (not needing in short term), I would remember the saying "Buy low and sell high" Both Gold and Silver are at many decade highs...the stock market is not at its high. If you are not a risk taker, look into full market ETF's which model the entire market and keep risk at market risk levels. If you already have long term market investments and are looking to diversify, then I would consider precious metals. If you definitely want precious metals without market investment (read my first few sentences on my opinion there), then diversify with both Gold and Silver, maybe even some Platinum. You cannot go wrong with American Eagles of these types for this type of investment.

 

There's a lot of terrible advice in this thread. Why are you restricted to those three options? I recommend buying as many physical 1oz silver rounds as you can. You will have no problem selling them for close to spot at anytime. Even if prices are temporarily falling. Forget your 401K and the rigged stock market. It's a zero sum game meaning one person has to lose in order for anoter to win. How do you like your chances against the billionaires and Too Big To Fail Banks?

If you are secure in your job and income, I'd make a major move into silver right now. Leave yourself a little breathing room, but hold as little of your wealth in paper as possible.

The best advice I can give, I know you won't take and many on this board will ridicule. Go get as much credit as you can. Take advantage of the historically low interest rates and leverage yourself to the MAX. Put all of the borrowed fiat into physical silver. Then when silver hits $100 later in the year, you can sell a portion and wipe out the debt. Or you can do the REALLY smart thing and go bankrupt. F 'em. Silver is the trade of the decade. Maybe of our lifetime. It's all about supply and demand.

Silver will enter a bubble at some point, but you won't be able to tell based on it's price in dollars. Dollars are losing value just as fast as PMs are gaining. Silver will be in a bubble when 1 oz buys 100 gallons of gas. Or when 100 ounces buys a nice house on 5 acres. That will be the time to sell. Not for paper, but for real things that improve your quality of life.

I'd also recommend being a little more discreet with your information. Both online and in person. Don't brag about your collection to anyone, including your parents. Buying from coin shops and coin shows with cash gives anonymity that can't be obtained when shopping online and shipping to your house.

One last thing. Start reading ZeroHedge.com every day.

 

Other than suggesting i borrow and then declare bankruptcy, thanx for the post. I have no desire to play or learn the stock market nor do i care to put my money in an IRA so that was never in my cards. I'm not limited to those 3 option at all and when i made that post i didnt know most people on this board thought negatively to having 5, 10, kilo, or 100 ounce bars over single ounce ones. With roughly the money i in my examples, how would you suggest i split up my purchase?

 

honestly, I would put half your money into 1 ounce rounds/coins and the other half into "junk silver", especially if you have a local coin shop where you can buy the junk silver. Junk silver aka 90% silver is dimes quarters and half dollars minted 1964 and prior. The great thing about them is that 5 dimes = 2 quarters = 1 half dollar, in silver content. You can calculate an amount based on "Face Value", and that is how it is sold, by face value (usually not by weight, but sometimes.). $1 face value has .715 of an ounce of silver in it. Read up on the subject. It can be obtained for lower than spot prices, and it can easily be split up in the event that you have to barter with the silver. As I said earlier, it has top recognizability, top liquidity (everyone knows what a dime and quarter look like), etc.

 

Why is this? Is there no advantage to holding both 90% and .999. Both have distinct advantages.. Why should I just hold one. Could you explain this please?

 

1oz rounds or bars with the lowest premium. Buffalo's have a lower premium and are highly recognized.

I didn't say you had to go bankrupt. You can pay off the debt when Silver goes parabolic. The wealthiest people use debt to make money. Only they use terms like leverage and margin accounts, so it doesn't sound as bad. This is a unique opportunity for you to make life changing money. I appreciate your opinion, though. I'm allergic to debt myself, but I'd be willing to take a business loan if I believed in the idea.

 

I originally purchased 1 ounce Engelhard, Credit Suisse and Johnson and Matthey bars. I've since changed over to ASE's on all newer purchases just because I like them, but I'm still holding my old bars as well.

 

LOL! When Exxon takes a barrel of oil out of the ground and sells it, who "loses"?

Buying stock gives you a way to share in corporate profits, which is the very opposite of a "zero sum game", unless you're summing over the entire lifespan of the universe. Yes, the big guys will make more money than you will -- but you can make money, too. In fact, over the long term with a diversified portfolio, it's hard not to make money in the market. I've bought some doozies of losing stocks, including one or two that turned out to be not quite too big to fail completely, and I'm still well ahead of inflation overall.

Remember, the fat cats have the advantage in the market -- but you can buy shares in the fat cats, too.

 

Let me give you an example. Back in the late 90s when tech stocks were in their bubble, there were a lot of people who purchased a package of them and imagined themselves to be diversified. I used to haunt the old AOL investment chat rooms back then and the attitude was pervasive among the believers. But when the crash came, their entire portfolio moved in the same direction at the same time and they were crushed. It was painful to watch. Fast forward to today. If you purchase several different forms of silver and gold, do so because you like them and not because you believe you are gaining some sort of diversification, because you aren't. They will rise and fall together at approximately the same rate at approximately the same time for the same reasons. That isn't diversification. So if someone said that they wanted to buy a variety because they are collectors and liked each individual piece, that's okay. But if investment is the primary purpose, it is only fooling yourself. I know the 90% coins are popular among survivalists, but they really aren't investors in the normal sense of the word. The OP sounds like more of a traditional investor than a survivalist, hence my comment.

 

Ease of resale isn't appreciated in the type of market we have today because everything is very liquid. But nobody knows what the conditions will be at the time they are sold, so in my opinion this should be a major factor to consider in what you purchase. Also, there is a possibility that ASEs will attain some numismatic premium in the future. There are many collectors of these coins. Someday, the US Mint will discontinue the series and every ASE in existence will immediately accrue at least some scarcity value because the supply will be fixed but demand will continue. No guarantees, but the possibility should not be ignored.

 

Thanks for the clarification.

 

Visited my local coin store for the first time today and their prices were cheaper than the big sites like APMEX. I was pleasantly surprised by this. Ill be much happier keeping my money local and buying bullion without shipping or tax (for over $1000 purchases).

 

awsome, thats the best way to go. Like i said earlier, most dealers will let you "Cherry pick" from the junk silver. This is obviously not possible online. Most of my junk silver is in AU to Uncirculated condition.

 

Strictly my opinion, and of course the final decision will be yours. Cycles always have different factors effecting them, but they are still cycles or bubbles. Usually, when everyone is telling you to mortgage your house to buy a security or a precious metal, the cycle is in the late stages and the risk of loss is increasing. Just as a reminder of the potential downside, go look at the last time silver was in this neighborhood in the early eighties. When the cycle ends, it will end quickly, and it will be years before it recovers. This one might be a little different, there might be quick and ugly corrections, with an overall trend to the upside over a long period of time, but it might end in a massacre. Your greed will tell you to purchase a great big chunk of silver quickly to get in on the run-up.
I would advise that you decide on a nominal amount - (disposable income that you will not miss, if you lost it all tomorrow) and invest that amount over time. (every week or every month). You will spread out your risk and be betting that inflation and global conditions will probably make silver much more valuable 10 years from now. If the market crashes in six months, you will still be able to average down to eventually make money. If it goes up, you will be making money.

 

PMs are not is a bubble. Not even close. How many people do you know that own more that 5 oz of physical metal? I don't know a single person who owns a single ounce aside from jewelry. Not one single person.

How many people were buying NASDAQ stocks in the tech bubble or houses in the mortgage bubble? How many students are borrowing for their education in the current student loan bubble? The only reason you say "everyone is telling you to buy" is because of the Internet. It allows you to find real information in a way that you couldn't in the past. Most people still get their investment advice either from cable TV or not at all. We are in the 3rd inning of the PM bubble and things don't get really interesting until the top of the 8th.

Does suggesting that someone put a "nominal" amount into PMs mean they should leave a significant amount in fiat paper? Talk about an investment bubble that is in the late stages. We're in the bottom of the 9th and the US Dollar is down by 14 Trillion in that bubble.

 

Buster I am confused

First you write this
"PMs are not is a bubble. Not even close."

Then
"We are in the 3rd inning of the PM bubble and things don't get really interesting until the top of the 8th."

All in the same post

 

Don't know how to respond to most of your email. Not trying to make you upset.

I doubt the internet was where people were getting most of their information in the eighties. It sure was not the case in the late 60's with the wallstreet "gunslingers" who had gold fixtures in their bathrooms one day and were contemplating jumping out a window the next.

I am also sure the Dutch buying those tulip bulbs four hundred years ago thought that even though the price the were paying seemed ridiculously high, they were sure they were only in the early stages of the bubble, and there were plenty of bigger idiots left they could sell to.

Lastly, I know lots of people who have gold and silver bullion, but those people won't be the ones who spell end of the silver rally. It will be the countless people with silver jewelry, tea service sets, silverware, coins they have taken out of circulation, and millions of ounces of other junk silver. There is a price that they will see as a very compelling point to convert all that junk silver into "fiat currency". When they do, the market will stutter, people will panic, and everyone will run for the door at the same time. The "internet" will greatly aid in this process and probably excerbate it. It might be at $50, $75 or $100, but it will happen. If I knew when, I would not be going to work everyday.

The only point to my post was that any investment should be made cautiously and rationally, with as little emotion as possible. Even very smart people can lose money. Insert whatever snappy saying you wish at this point - Greed kills, pigs get slaughtered, etc.

 

I read an article years ago, "Twenty Five Ways to Lose Money by Dollar Cost Averaging." I wish I had saved it. But basically it is a myth that this technique will reduce risk. And it basically outperforms a lump sum investment in only one specific case - where the price is much lower than the starting point for an extended period of time during the program. In all other cases, it increases the average cost and risk. And if the price dip occurs near the end of the program, the losses can be enormous. Your financial planner probably won't point this out, but you can prove it to yourself by playing with a spreadsheet.

 

Indeed. However you are making emotional arguments to prove your point. (idiots buying tulips, gunslingers jumping from windows, etc etc) You have not provided any rational argument beyond irrelevant past anecdotes to make the case that Silver is in a bubble. I would also add the concept of "dollar cost averaging" is exactly the type of investing that someone does who does not take the time to understand what they are investing in and is convinced this notion will eliminate the risk.

A rational argument on current silver pricing would provide a convincing case on what is driving silver prices. (hint, it isn't grandma's silver set) IMO, I do agree with you that heavy silver investing now is pretty high risk, but not for the reasons stated in this topic. There are two aspects to this. Many people are buying because prices are higher than yesterday. (these are people that will get burnt) The other is that people make the mistake that Silver = Gold and then make the same arguments for silver. (they will get burnt too)