KITCO Pool Account.

the third article basically says whether a PM ETF is subject to the max cap gain rate of 28% for collectibles really depends on....

 

Log in or Sign up to hide this ad.

This post is for general illustrative purposes and not to openly criticize the OP by such example. We assume the OP and others are fully capable of making and living by their own decisions, and are the only ones who truly know how best to abide by the choices they make. Please understand this is more as a demonstration of action vs. restraint in investing ideas.

Yesterday, at 4:30 pm the OP asked Where to buy palladium?, to which was supplied several commonly cited bullion web sites, amongst them Kitco's online bullion store. At 6:16 pm yesterday this KITCO Pool Account thread was born and it quickly filled with various perspectives on the topic. In less than 24 hours, at 4:10 PM today (see post #16 above) the OP has reported mailing funds to presumably open a Kitco Pool Account without knowing how long it will take to engage. [Let us also presume that these funds were mailed in a secure fashion with some sort of delivery confirmation or signature required to confirm receipt by the receiver thus lessening the delay left wondering about when the account will become active.]

It appears that out of the 15 or so posts one person had first hand user experience with Kitco Pool Accounts. They more or less warn that getting into this comes with significant risk of failure, to expect to loose the money you invest or to think of the money you invest with as something you can just throw away! That's not 'wealth protection' investing advice, by my interpretation, nor is it a positive outlook if seeking profitability. It's a crap-shoot. Gambling. The sort of thing that robs many investors of their hard earned money. It's a careless attitude and a careless approach to investing.

So was the advice sought here heeded? Were alternate options or competitive pool accounts fully compared and explored? Were the risks weighed or even understood?

I fear this demonstrates the sort of risks the headlines propel investors to take and risks the hucksters we encounter pushing PMs want investors to make. It's this bums-rush style of selling something, backed by fear and a pressing need for immediate action that we should be wary about. It demonstrates the seriously rushed style of decision making that will crush many (bullion) investors during this run up. It may signal a need for greater caution if you are a buyer. It's very concerning and we will likely be seeing a lot more of this type of investment behavior and will continue to see more of these risky maneuvers in the weeks and months to come.

Remember not to 'jump' into investing. Don't act out of emotion and take your time to learn the pitfalls, to see if you have the stamina to run the course, and not just toss your hands up if you loose a lot or all of your money on a crap-shoot because the opportunity was before you. These metals have been around for centuries, and won't go away anytime soon while we are saving money and learning how best to invest these funds, be it metals or anything else... and there is more to invest in than just metals.

Good luck and good investing to all. :thumb:

 

gboulton. I'm not trying to make this about you or that your advice misdirected the OP with any intention. I think your reply (post #23), while obviously in self-defense of your original comments and for feeling mis-characterized, which was not really my intention, was filled with more useful advice than your first reply to the OP. However, my post (#22) was my personal interpretation, as noted, of the situation as it played out and fueled by the handful of replies the OP received. It was meant to illustrate the rush to decision that people come to forums with questions after reading or seeing media hype, find themselves involved in certain investments before they spend any quality time researching a move. I'd suggest that your original post played right into the justification the OP sought to jump into the Pool Account with little other research. Again, not meaning to call any ONE poster out, but to show how quickly some will react.

 

It's been my experience that when someone starts a conversation that "I think this is a great way to...." followed by "what do you think?" They are not really seeking advice but rather acceptance of what they have already decided to do. i.e. "if others feel the same way then my decision can't be wrong, or maybe they will jump in the same boat with me, etc etc, false safety in numbers, misery loves company, etc.

This appears to have been proven out in this particular topic, and when I wrote my response, it was more directed towards others who might read the OP's topic and decide to buy a ticket on the same train ride. Kitco's pool accounts are not a great way to purchase PMs because one isn't purchasing PMs. It's a method to gamble on the short term price swings of PMs. Nothing more and nothing less. Nothing wrong with this if you have balls of steel and can withstand substantial short term losses, but you can really have more fun in Las Vegas where you at least know the odds.

 

Nicely put fatima.

 

Fair enough, and well said.

Quite inclined to agree here, for the most part. I'll take two exceptions, however.

First...it doesn't take "balls of steel" if you're not risking anything substantial.

And perhaps that's really what's under this whole thread. The OP, as both of you have pointed out, was looking for a reason to do something he wanted to do. Ok, good for him. I wish him luck. But, let's be honest here...how "wise" of a move this will be for him depends ultimately on what his risk is.

And risk doesn't have to be a particular dollar amount. Maybe the OP is debt free, with a 6 figure family income, and is tossing around a couple thousand dollars. Most likely, he CAN afford to go play with that kind of money.

On the other hand, maybe he's a college kid with $50k+ in debt, who charged a pizza last night. In that case, risking even $50 is insanity.

Since none of us know the OP's situation (or anyone else's but our own) I think it's probably "overzealous" to label his DECISION as foolish, or anything of the sort. Does it fit, as you guys described, the idea of "I want to ____, what do you think?". Sure. but that doesn't necessarily mean it's bad.

The OTHER nit I'd pick is the line about having fun in Vegas...SOME of us don't GO to Vegas (or any casino for that matter) to have fun...we go to make money.

A very small percentage of us succeed.

It's left as an exercise for the reader to determine why i keep drawing the same analogy.

 

You sound like a professional gambler. I don't know your game(s) though.

Also, I only meant to use 'gambling' figuratively where the type who play with only faith to win lose. I didn't mean to pass a negative judgment about Pro or Vegas-entertainment style gambling.

 

The amount I put into the Kitco pool account, accounts for a very small fraction of what I have invested in other places. I have the ability to lose money without it affecting my life in a drastic way. I've also made 35% profit on my gold and silver investments from 1-2 years ago and I am looking to turn that profit into palladium. My profit equates to about 2 ounces worth of palladium, so if I do lose all of it, it would suck alot, but I don't see palladium dropping to $0 anytime soon. In addition, I have done plenty of research regarding investing in bullion. Buying a couple ounces of palladium into a Kitco pool account made sense to me. I wouldn't have to pay shipping costs, insurance, and a higher premium. In addition, it's hard for me to sell physical palladium locally without selling it for under spot. There's a higher chance of my palladium being lost in transit, somebody stealing it from me, and of my bank (which has my safety deposit box) burning down than Kitco going under and losing my money. Also all their pool accounts are 100% backed by vaults around the world. By buying palladium into a pool account, I pay a significantly reduced premium compared to a physical bar ($3-$4 vs. $20+), and the buy back price is less than 1.5% below spot. I can also sell 0.1oz if I want and keep 0.9oz...the ability to do this is a positive thing in my eyes. Heck, I can even buy rhodium through Kitco's pool account.

My reason for starting this thread was to get somebody's first hand experience in dealing with Kitco pool account's. Their viewpoint is valuable since they have first hand knowledge regarding my topic of interest. In addition they did lay out the pros and cons of a pool account, and I acknowledged them in my decision. But ultimately, the pros outweighed the cons for my situation. For somebody else, this may be different, but for me, a Kitco pool account made sense.

And remember, I only bought 2 ounces of silver to start my account, I'm not jumping into things. I sold alot of my bullion this week and the last and made a nice profit, but I still have much, much more invested in physical bullion than I do in a pool account. I'm waiting and seeing how the markets play out. I believe that metals will cool off a bit after this run, and that's when I'll buy. For now, I'm just watching things play out.

 

I dunno about the professional part...I certainly don't make a living at it. *lol* Probably safe to say that I enjoy more hobbies than I otherwise could because of it, however.

And I think my whole point with the analogy to poker is this:

Poker is the only exception in the casino : NOBODY takes the house's money, REGARDLESS of the outcome of any hand/game.

Consider the vast majority of casino games. Roulette, slots, etc. They share 2 traits.

First, they are random. NOTHING you can do, from yelling to praying to holding your mouth a certain way, can change the outcome of a round/hand/game/roll/pull. Say the magic words all you want...that slot is still going to come up Orange-Cherry-Bar.

Second, by definition, the house is going to win over time. The simplest of this expression is roulette. A bet on Red or Black pays 2-1. The 'catch" is those two green slots, 0 and 00. Spin the wheel 100 times, 1000 times, 1,000,000 times...and red won't QUITE come up 50% of the time...ever so slightly less. The reason they're set up this way is simple...when you DO win, it's the HOUSE'S money you're taking....so they're going to make darn sure they win more than you do.

Now...there are a FEW games that are exceptions to the first rule. Blackjack is the most well known...and most closely watched by the casinos. There are certain things you can do (google "card counting" and "MIT blackjack team" for interesting history/insight, if you're unfamiliar) to overcome the house advantage, and swing the odds in YOUR favor.

The problem, of course, is that blackjack, while being a "beatable" game with the right knowledge, doesn't escape condition 2 above...you're STILL TAKING THE HOUSE'S MONEY when you win. go figure, they don't like that a whole lot. being, as they are, private businesses, they're welcome to refuse service to any customer they wish. Since they know the strategies as well as the best counters, odds are extremely high you'll be caught, asked to leave, and likely exposed to other casinos nearby.

The ONE game that escapes both rules above is poker.

First, it is a game whose outcome not only CAN be changed by how you play it, but is frequently DETERMINED solely and only by how you play it.

Second, the house couldn't care less if you win or lose. They take their rake or tournament fee, and have their money. NOTHING you can do will get it BACK, and nothing THEY can do will take more of it. They're going to make X, whether you win or I do. It's not their money in play...it's the players'. When you win, you take everyone else's money...not the house's.

Those two facts being the case, it makes the analogy to a Kitco pool account pretty accurate, really.

Your success is, over time, determined by how well you play the game. How well you play is determined by making the right decisions. Making the right decisions requires knowledge, intelligence, wisdom, and information. Avoiding big losses requires patience, and knowing when you don't have enough information to take a risk. And hey...Kitco's gonna make their money either way.

And yeah...just like poker, there's still an element of chance. You can do everything right, and still lose...so guess what...if you went to the casino with $200, don't sit down at a $200 buy-in table. Find a micro- or low-stakes table, sit down with $20-$50.

Or...buy in at Kitco for a few ounces, not your entire PM portfolio.

 

To much uncertain with tax frauds etc with kitco......if kitco go bust you will losw

 

I prefer to have the precious metals I buy in my own hands vs someone holding onto them for me.

 

the only valid reply in my opinion. i have yet to hear one argument about how physically holding one's metals is a downside. security issue is one that comes up, but again, still to hear one VALID arguement. if having people know you have 25,000 silver eagles in a safe in your home is an issue it is quickly fixed - stop. telling. people.

 

"Only valid reply"? I disagree. Physical security of course must be considered a downside, either from the cost of a sdb to cost of a safe and possible risk of theft. To say its an invalid argument is simply sticking your head in the sand. I agree I would rather own the pm due to minimizing carrying costs and to avoid counterparty risk. An ugly fact many here do not talk about is the pm industry has been ripe with hucksters and con artists over the years. So, in an industry rife with swindlers, I prefer also to physically hold pm in a sdb. But, that still does not mean the point of physically security being an issue with physical possession is invalid, it very much a negative to owning pm.

 

nope. stickin with my analysis and conclusion. i dont do SDBs as i feel they do not allow me to "hold it". cost of a safe was zero for me as I had a 36 gun safe that handles my collection well. no chance of theft as noone knows but my wife and myself where it is, and our lips arent loose and aint sinking ships. no head in the sand here, i was in the finance industry during the collapse before i started my own companies and watched fortunes cut in half or worse. on A+ rated investments nonetheless. the only valid argument when discussing PMs is if you dont hold it, or rather, are the only one who knows where to go to hold it and are the only one to be able to get it, you dont own it. you dont have to agree with it and i dont expect everyone to. just like i dont expect junkies to wake up and realize they need to get off junk, or degenerate gamblers to never place a wager. the world is made up of a mix of all types. some are successful, and others arent. im pretty satisfied with my path so far.

 

Yeah, there has never been a case of a burglar accidentally finding coins during a robbery. Sorry to be a smart aleck, but you are acting as if there is zero possibility of loss, and zero cost. Those simply are not true. I am not saying your choices have been bad, simply that you are incurring a self insurance cost of keeping them at home.

 

who said it is in my home. the chances of someone "finding" my collection are about as good as finding a MiG jet under the sphinx.

 

I agree with the consensus. They have the PM's and if a world changing event happens, just how are you going to get them and/or get money from the holder? Plus if things really did get bad, most governments will seize the holdings, whatever part they can find after the holder sneaks off with what they can.

 

I guess it depends on how long one expects to hold. For the short term it's far more efficient to use an etf such as GLD or SLV. Low transaction costs, no storage fees, and tight spreads.

 

I agree. For long holders like me, I prefer to physically hold the metal to minimize fees. I have never said holding the metal is a bad idea at all Rhysherms, its just that there physically is a risk, no matter how small, to it. For me, this risk is less than possible liquidity or fraud issues with a third party, so I choose to take this risk, like you have sir. I was ONLY saying that no matter how small we might think it is, theoretically holding pm has a risk associated with it, just like having a third party hold it for you ALSO has a risk. Each person must weigh these risks and decide for themselves.