Why do you buy PMs

Nothing personal, but someone who has bought ASE's has stumbled into the numismatic gallery.

You either buy the cheapest silver you can find (junk silver), or you buy bullion for aesthetic value, whose premium will vaporize when times get tough, or worse yet, you buy slabbed Mint products, and take a 50+ percent haircut down the line.

 

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Agreed. They are beautiful and that's part of why I enjoy them. I buy at $2.50 over spot usually and sell back at $2.00 over so it's not a huge hit like other products but no quick turn around either. I just can't get into buying junk silver, even when I hand select rolls of Walkers for some reason.

 

i spent my $700 life savings on silver dimes, quarters, and halves when i was 10 years old (late 2008) for well under spot (about $6-$7 an ounce!) at flea markets just because i thought it was cool and that they might have numismatic value 40 years from now. when i was 13 (2011) i needed some money to buy a computer, so i took most of those silver coins to the coin shop and just about fainted when he handed me 43 $100 bills. i guess i just got lucky, bought and sold at just the right time . when it dropped back to $20 an ounce i bought another $2000 worth, and have accumulated even more over time. i now have about 160 ounces and im still stacking

 

You need Ninja™ coin tubes, opaque black. Never have to eyeball your embarrassing junk silver again.

 

I like this post a lot. I hope most here know I feel the same. Though we might disagree on the edges, most of us here recognize there is value in physically holding pm. So, like Justafarmer, I might not agree with you 100%, I will stand behind all of you 100% for owning pm.

Myself, I love silver. I always have. If my mother were alive she could tell you how I was obsessed wih silver coins and objects as a kid. I bought my children sterling silver baby spoons, I own sterling silver flatware, I own lots of silver coins. Silver is just beautiful to me. For investments, I find pm a helpful contra asset and emergency fund to own. So, I intentionally own some as a financial investment. I do not believe ALL of my investments should be pm, but neither should it be all land, all stock, etc. Just like a farmer applying manure, you need to spread it around.

 

I think that silver is an investment that will pay off some time. Plus I get to check them out. To me it's like a treasure hunt. If I find some kind of really cool coin, then it's better than just simple stacking.

 

agreed.. in 1964 a quarter would get you a gallon of gas, maybe a little more, that same 1964 quarter today will still get you a gallon of gas...

 

But you left out two important parts, 2 years ago, that same quarter would have bought you 2 1/2 gallons of gas AND if you had took that quarter and invested it in a plain vanila S&P index fund in 1964, you would now be able to buy 8 gallons of gas. Fair is fair.....

 

If you assume gas @ $4, 8 gallons = $32. Has an S&P Index fund multiplied 128 times since 1964?

 

No, the actual rise of the S&P was from $70 to $1900, but there is another piece. An investment in the S&P also pays dividends. Currently the av. dividend is 1.96 % but that is historically low, the average dividend over the last 50 years was around 3.26% and when you roll this back in and compound that also, you get a significantly higher return then just looking at the index numbers by themselves. I also used$3.50 for a gallon since that is what it is here in NJ. When you add it up, my number are fairly acurate

 

That would be quite the accomplishment! The first index fund was created in 1975.


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It was theoretical, as a comparison since the S&P certainly existed. In addition, you could easily mirrored the index yourself.

 

Everyone always conveniently forget about dividends when comparing markets to pm. Maybe since pm pays you nothing currently, the idea of a dividend is almost a foreign concept to them? Or, its just convenient to forget about it when wanting to make the case how pm is such a great standalone investment.

Same thing happens when people compare pm ownership to farmland as well, they conveniently ignore current net rents and only compare capital appreciation. Heck, I have seen pm gurus "make the case" that owning pm historically has been a better investment than owning your home, ignoring tax reduced costs of borrowing, imputed rents, etc.

 

Not unless you had millions to invest. You had to buy in 100 share blocks. If the average share price was $30, to buy all 500 you'd need $1.5 million and would pay a commission of at least $50,000. You had to buy 100 share blocks and commissions would have been at least $100 per trade. So, 500*$100 = $50,000 to buy and $50,000 to sell.

I'm probably underestimating the commissions.

 

Right, beside the fact we were talking about a theoretical quarter, which should be obvious you could not buy and sell stocks for, no mention of capital was stated, so you agree? It could have been done.

 

Money managers have been held to standards of returns, (the S&P 500 and Dow Jones Industrials), since before I was born. It was very common to score them agains both in the 50's and 60's. REGARDLESS, Mike was using the S&P 500 as a general assumption as to stock returns. So, the point of when an S&P500 index mutual fund was created, or the practicality of buying one on your own, is meaningless. Mike was simply trying to point out, on average, stock returns greatly outperformed pm in that timeframe.

 

yeah, but some folks just like to nitpick

 

I dig irony!!!

 

I guess the irony of your post went completely over your head, just saying......

 

Due to a warm, rainy spring, we have a bumper crop of nits already this year. I will pick you a bushel and FedEx them anywhere in the U.S. for $179.95 -- they are rich in Vitamin Q, and taste best when your mouth is already full, so they go down easy.