Investing in bullion -- should I do silver or gold?

Unless Market jitters causes further rises in the Metals Market, Silver and Gold should fall after the beginning of the new Year and be around their lowest prices before or around May! This is normally the best time to buy but you really have to watch the Market closely. Although Silver took a a hit (Market correction) on it's value earlier this year, it has rebounded nicely and IMHO is a better investment over Gold. However, don't take my word for it. Go to www.kitco.com and go to the Historical Charts for Gold and Silver. Compute the amount of gain on a given Dollar investment on both (say $50,000) from their lows to their highs and see the difference in the gains.

I wish that I would have known about and had invested in Rhodium a few years ago when it hit it's low! I wouldn't still be working today, would probably be in Jamaica sipping on Margaritas and
"Evry-Ting Goin Be Ahwree Man"!

Good luck!


Frank

 

Log in or Sign up to hide this ad.

i was discussing this with my father last night. the best investment is not buying a bullion coin, but buying a rare coin regardless of it's precious metal content. i am building up a collection of Newfoundland coins at the moment and might have to stop - these things are very hot right now and are commanding a premium which i cannot afford.

as coin collectors, we should be looking to preserve high quality and rare coins, not looking to make money on the bullion value of the coin. i collect coins because i like the coins, their history, and the connection to the past they provide me. i buy the best i can afford because they will increase in value.

if you want to make money from the metal value of the coin, horde nickels and pre 83 pennies and then try to get the ban lifted (after you horde the coins). the minute you are allowed to melt the coins, load up the car and head to the scrap metal guy.

i'm in this hobby for the coins, not the dollars.

-Steve

 

i'm in this hobby for the coins, not the dollars. - quoting Steve

While you make very good points, investing in coins and bullion are two different things. Bullion investing is speculation in world demand for the metal itself, and low quality (virtually non-collectable) coins is simply a method of accumulating silver that is government guaranteed to be 90% pure. With the billions and billions of used up pocket piece coins around, there will be no loss of rarities by keeping them aside for silver value.
Coin collecting is a much more noble thing, in my opinion. A fine old coin is a piece of history itself, and one becomes a caretaker as well as a collector/investor. Any incidental bullion value may affect a common Saint, but not a rare one. The role of the owner is completely different, and the mindset between the purchases could not be more different. I had a 1793 half cent at one time. If copper had hit $10,000/oz I still would never had sold it to be melted. This bag of 650 used up Roosies? I would trade 'em in a heartbeat! I love old coins, but not every old coin! Mike

 

I am investing in oil--

I'll will be filling up the cars later today.

 

I don't believe there is any ban on melting coins.

 

Cloudweeper:
Actually there is currently a ban on melting cents & nickels.
Imposed earlier this year.

 

What? not suppose to melt nickels and cents. Oh well, so much for the new smelter I bought on Ebay last week. Glad they have a 7 day return policy.

 

I've heard a few others say something along these lines before, and I've been confused by it ever since. I realise there are taxes due on investments sold such as bonds, stocks and real estate. But, how does the IRS track the rare coin and bullion market in terms of taxes on profits? I could buy 5,000 lbs of silver today, wait for the market to catch fire in 25 years, and unload it and say I bought it the day before, claiming my prfit margin much smaller than it actually is. Who's to know the truth but myself? And I'm sure not about to be honest with those crooks.

Coins and bullion don't come with purchasing dates and prices on them like stocks and such. What am I missing here?
Guy~

 

Guess I look at things differently. When the gov starts being honest with my money, maybe I'll start being more honest with theirs. If they wanted to tax me based on the face value of the coins I sell, thats one thing. I'd question the legallity of taxing above that.
Guy~

 

Howdy,

I can understand how you feel. However, you need to be careful when dealing with the Blue Meanies (IRS).

The way the law reads is that ANY gain on ANY asset is a taxabale event. Most coin dealers require you to fill out forms for sales of any magnitude - they take my drivers license number in Michigan for ALL sales.

There is an exemption for garage sale transactions AND small transactions will probably always fall under the RADAR.

But for larger transactions, what makes you think the IRS won't start asking for records from dealers and pawn shops? Say for anthing over $1000 or whatever? [hell, they probably have them now]

Hey, I'm the sort that likes to be very careful in my dealings with the Gov't but also feel it's the patriotic duty of every american to legally minimize their taxes.

Regardless of your feelings, I'd suggest you keep good records of your buys so that when you get to the sell point, you will at least have the choice of reporting.

good luck,

rono

 

rono:
Good points, in fact, I understand that Canada is requiring eBay to report total sales for the major sellers.

 

I do keep good records of my purchases for my own knowledge. I still think it's wrong the gov rapes people for enjoying their hobby though. Why is it the gapital gains taxes on stocks and most other investments is a flat 15% while collectibles are taxed up to 28%? Thats absurd!

Lucky for us, I found out, under tax code Section 1031, we don't have to pay taxes on any gapital gains made if that money is re-invested. One could take the profit and re-invest in a lower taxed option and come out ahead. It's just a shame we're penalized for our hobby at all.

One other point I was confused on. Would we still get stuck paying CG taxes on coins in those states that have no sales tax on coins? I buy mostly in AZ, where there is no tax on purchases of currency. Wouldn't that apply to seeling them as well?
GUy~

 

as some others have suggested, if you are looking for an investment, i would put your money into a balanced portfolio of funds making certain to have international exposure. that said, you stated you wanted to invest in silver or gold (i know this may not go over well in this fourm) and in my mind there is only one way to do this if you are looking only for investment purposes - the gold and silver etfs. they trade like stocks and are their prices are tied to the respective commodity prices.

here are the links:

GLD
SLV

 

I've never been asked to fill out anything or show id for any coin purchases, and I always use cash. But, like I said, I usually buy in AZ where coins aren't taxed. If I were ever asked for id over a coin purchase, I'd probably walk out.
Guy~