Is bigger always better when it comes to bullion?

When it comes to buying bullion there is always the pitch of “the more you buy the less premium you pay!”.

A 10 oz bar of gold has a much lower premium than buying 10x 1oz bars of gold.

But is bigger always better?

It seems like there is much less liquidity.

Let’s say you only need a few thousand dollars.

Maybe your dog/cat got sick/injured and you have to pay a vet bill.

Or maybe your water heater broke and you need to replace it.

Well if you have a 10 oz gold bar you have to sell the whole thing and then you end up with like $18,000 in cash and no metals when you only needed a couple thousand dollars.

Whereas if you had 10x 1 oz bars you could sell 1-2 of them for that few thousand dollars and keep the rest of your PMs.

What do you think?

Would you rather pay a lower premium and have less liquidity or pay a bit more and have that liquidity?

Just curious

 

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Bigger is often worse. It's easier for fakes, you have a much smaller market when selling especially on big gold bars etc

 

Well I mean I'm talking about if buying from a reputable dealer like JM Bullion where the odds of getting a fake are little to none.

It would destroy their reputation to be selling fakes.

 

The odds are significantly higher on bars from anyone but the manufacturer. They wouldn't knowingly sell one but many of dealers and companies have been fooled by fakes they thought were real. Bars are by far the riskiest

 

Put some money in a Money Market Account.

 

Already got one.

My financial advisor recommends 10% of my portfolio in PMs.

 

Don’t they get their bullion straight from the source?

I’m pretty sure like Perth Mint bars are bought directly from the Perth Mint.

 

None of them get 100 percent straight from the source. If that were the case things that sold out would never be back in stock and things would only be available essentially the year of issue

 

I'm just going on the fact that I've seen some dealers get monster boxes from all sorts of foreign mints so I figured maybe big dealers like JMB & APMEX did that too.

 

They do but again as I already said......

 

I know you said that I was just explaining what my thoughts were prior to this thread.

 

Can't beleive that pie hasn't slid out of the pan yet

 

During the past fifty years has there ever been the need to tap into personal PM reserves? What event would precipitate the need to use PMs?

 

You need a new financial advisor.

That % is too high, IMO, unless you have LOTS of discretionary investment $$$.

The money you put in PM's shouldn't even be considered part of your investment/retirement portfolios. It's a "rainy day fund" that may or may not appreciate. It might be worth 500% of what you paid...it might be worth 50% of what you paid.

It doesn't generate growth or income/dividends, and in a low-rate environment, you really can't "waste" $$$ on non-interest bearing assets.

 

If you LIKE the object and the images on it, that's the major reason for buying something really big.

Bar premiums are low but big coin premiums can be big. I just saw a 12 ounce Pope John Paul II gold coin go for $30,000 (about a 30% premium).

It is VERY TOUGH for a local coin shop (LCS) or many dealers to buy multiple ounces of gold for anything over melt because they might not be able to unload it. They'll probably pay you melt but not more.

 

If you've got a MMA then use those funds to pay for the pet surgery. Why would you use the gold in the scenario you posted?

As @GoldFinger1969 said, you need a new financial adviser. 10% of someone's portfolio sitting idly in PM's is some of the worst financial advice I've ever heard. I won't reiterate what GF1969 said because he was spot on and eloquent in his explanation. Honestly, that advisers advice is almost 'malpractice'.

 

Dudeee it was just an example!

The fact is people sell bullion all the time when they need some money.

Oh and most financial advisors recommend 10% in PMs if the client is interested in PMs.

You can find that advice all over the place.

 

Well I know Vermillion Enterprises in Spring Hills, Florida pays spot + $55 for a 1oz American Gold Eagle and spot + $2 for a 1oz Silver Eagle.

They even accept sale orders via mail so if you ever want to sell for more than spot check them out.

 

Well dudeee, you give a scenario that is just ridiculous and then retract it as 'an example' when you're called out on it. Make your scenario realistic and you'll get bona fide replies.

Absolutely people sell bullion when they need some money. You elected to use a 10 oz bar of gold bullion in your 'story'. Honestly, if someone's got a 10 oz bar of gold sitting around, the likelihood of them needing to sell it for a grand or two to pay for some random expense is far fetched.

And you can find the same conflicting advice that 'investing' 10% in PM's is a fools errand.

 

Actually, not necessarily, MS.

I ran across many people -- mostly older -- who had TENS of thousands of dollars in PM's and gold....and maybe $500 in a savings account and no IRAs or investment accounts.

Mostly these were people who grew up in the 1930's-1970's and distrusted financial markets (1929 Crash) or believed gold was gonna have another great decade like the 1970's any year now.

Today, you find people much more knowledgeable and responsible.....they're on RobinHood buying Gamestock calls options.

Some things never change !

Seriously, I think people who hoard PMs and gold to the exclusion of financial assets has dropped alot. The last 40 years people have access to information that was never available before unless you worked on Wall Street.