Bullion vs. Savings

Does Bullion investing compete with just regular savings? I did a quick check and for 10K on my savings at 7% interest rate over 10 years, I'll end up with 18K. I'm not familiar with bullions at all and what's its market is. Is bullion investing a safe(r) bet? Just thought I'd check with the bullion folks here.

 

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Where are you getting 7% interest on your savings? Sign me up for that.

 

Investing in bullion is sheer speculation. The price could fall as easily as it could rise. JMHO!

Chris

 

NO, bullion investing is NOT "safe" in the sense of "I'll make a profit in ten years".

Take a look at any long-term silver price chart. There are peaks, valleys, and long stretches where it stays more or less the same. Are we in a valley, or the base of a big climb, or the top of a longer fall? There's absolutely no way to be sure.

I'm sitting a lot of silver that cost me a lot more when I bought it in 2011 and 2012. There's a chance I'll see silver prices back at that level sometime in the next 20-40 years, but I'm not counting on it. More than 40 years out, there's little chance I'll see much of anything.

The other thing to remember is that if you're buying and selling silver to a dealer, you'll pay more when you buy, and get less when you sell. For a high-volume dealer, the difference might be 10% or less; for smaller local dealers, it'll likely be higher. That buy-sell spread will eat up part of any gain that silver makes while you're holding it.

If you have a way to buy silver for less and sell it for more, forget about holding it; just buy it and sell it as quickly as you can, harvesting and compounding your profit.

And like @Garlicus said, if you know of a place to get 7% on savings (as opposed to a portfolio that has historically averaged 7%), please share!

 

Yeah, re-reading my post, I didn't make myself clear...I was thinking more in the lines of making more than 8K over 10 years. Bullion will fluctuate but maybe over time, it may make me more than 8K...probably not lol.

 

Haha, my bad...I used some bank calc and didn't change the rate of return (left the default). Looks like the average is more like 0.5 lol...that makes bullion competitive I guess?

 

Investment and speculation are all about risk vs. reward.

To my mind, bullion is a much poorer investment than equities -- put $10k in each, hold them for however long, and the equity pile is likely to be worth more than the bullion. You can cherry-pick intervals where the opposite was true, but most of the time, equities win.

Putting bullion against money-market cash, there are more stretches where bullion outperforms. I'm still not sure what the odds are for an arbitrary interval starting today. But again, I don't have to pay 10% extra to put money into an account, or pay a 10% fee when I pull it out, as opposed to the buy-sell spread I do face trading bullion with dealers.

 

Glad I asked here...since I got this coin bug, I've been looking and researching about ways to make profit while also thinking about getting a collection going for my daughters 18th bday (she's 11). I've been reading the coin forums but then saw the bullion one so I thought maybe that's a better investment. I'll still check my change and do some coin hunting but I thought investing may make me a quick profit. Thanks for the reply!

 

A suggestion for your daughter's 18th birthday would be to get a Dansco Silver Eagle album and fill it with 6 coins a year, then on her 18th birthday, you can give her a completed album that will have value and be a nice collection.
Example: 39 coins (think that's where we'll be at in 7 yrs) x $20 each (minimum?) = $780.

I am doing something similar for my 2 nephews (2 & 8). I give them a current year for their birthday and a previous year (started with 1986) for Christmas. To keep the cost down, I actually purchased complete sets and that is where I get the older coins from (helps me keep track of which years they have received, as well).

 

Local banks are not even 0.7% here. Some online banks are 1.5% online. Lock your money up for 3-5 years and you can get over 2% in some places. Might as well buy some bullion or other investment if you don't expect to need the money soon.

 

Thanks! I'll look up Dansco Silver Eagle...I'm a newbie, still learning a bit about Lincoln cents hehe. Your nephews are LUCKY !

 

I just opened a 5 year CD at my local bank. It pays 2%.

 

10%, minus taxes, in 5 years. Not bad, I suppose, in this environment, but inflation is running higher. Rather take my chances in PMs at their current prices or mutual funds.

 

There are other better areas. I have held NLY stock for over 10 years as a dividend source. Currently the dividend is at 10.83%. Its a "dull" area of paper, but it is worth looking at if you have a stock account and can watch it ever once in a while. Use your own study of course. Jim

 

I just keep putting a higher percent of my paycheck into my 401K. I am a little heavy on my PM's right now so it's time to just put cash in my savings and bump up 401K yet again.

 

Trying to keep things balanced is for sure the way to go, right now i,am at 35% PM
35% stocks and bonds and about 30% Cash/Savings, so just about where i want to be just in case one wants to start running south on me ...LOL

 

I has been repeated ad nauseum here that bullion is not and investment: it is a hedge. Bullion should serve as a counterbalance to all other investments and sources of income with the hope that you never need to touch it. If you do need to touch it then things will have got so bad that its price probably will rise enough to compensate - if you can find a buyer.

 

I have over a dozen 10%+ dividend stocks in my portfolio and that one is on my watch list of those to be swapped in if one of my current ones starts performing badly.

 

i get 7%-71/2% on my stock portfolio with baby bonds & perfered stks esp with maturity dates-i buy metals for enjoyment& maybe just maybe silver will hit$20 one day!right now im speculating on platinum--lovd it @$940--

 

In keeping with those asking about 7% interest, I would like to know where one will find ASEs for $20. I'm on my way there!