Within the next few days Im going to have about 5k to mess around with. I really would like to hear from some of you as far as what you would buy and what you would stay away from. I know all the pm's are down at the moment. I was going to try and finish a few of my silver albums like the quarters and the dimes. I dont usually buy too many high grades but Im a the type that would rather have a hole filler than a empty spot. All your input is greatly appreciated and please be honest.
I like low priced numismatic silver for smaller purchases, but for a large purchase such as 5K I would be looking to get some bars to maximize my ounces. Probably a mix of 10 oz, 5 oz, and 1 oz, and some junk silver too. Maybe forget the 10 oz if you can get 5 oz for the same premium. I would stay away from mints and manufacturers that are not well known or established. A lot of people like official coins such as ASE's and Maple Leaves, but I would only go for those if you have the intention of selling. If you just want a core position, skip the premiums. I might also pick up some 1/4 oz gold coins. The premiums aren't too bad as compared to the 1/2 oz. I only buy from online retailers for small purchases. For something like this I'd either visit a coin shop (if they have inventory) or do a wire transfer with a bullion producer.
what else do you do with bullion? I think eventually you sell...I mean bullion is an investment...unless your collecting it...
With $5K available to "mess around with," I'd take a different approach. We are in a completely different position now than when gold was, say, $400 and silver was $10. I would instead buy something like GDXJ or individual gold exploration stocks if you have the skill to identify them. If metal prices flatten out or drop, many of the juniors will do well anyway because prices are far above the cost of production. And if metal prices continue to rise, the stocks have the potential to rise much more. From here, PM stocks look poised to outperform the underlying bullion no matter which way it goes because the stock prices never really ran up with the bullion prices to begin with. No guarantees, of course, since we are just messing around.
I personally have advocated bars to maximize ounces. However, it sounds like you are a collector as well? If you are a collector, and also wanted to invest in silver or gold, I would look at "double dipping" and buying collectible coins you like and need that are bullion priced. Do you have a Franklin half set? I bet you could pick out a nice xf-au+ set from bullion boxes. See what I am getting at? Get some coin collecting return in excess of bullion investment. If you assume all bullion will behave similarly, you achieve that goal, while getting additional "profit" by adding to your coin collection and enjoying that. Chris
Great advice Cloud, yet the majors are severely underpriced right now. I just read a WSJ article on them. I am not naive enough to believe all of the best investors in the world have "missed that", so I am very leery of what they are seeing that I may be missing. I own some stocks that also produce gold, but not primarily. I have looked long and hard at these stocks, and its actually their undervalue right now that has me skittish about them. Why do you think they are so low priced at the moment?
I think platinum would be a good buy right now since, as I just saw in another post, it is lower than gold now. I expect it to correct soon, but whether that be by platinum rising or gold falling I don't know. If it were me, I would just look at what I could get with the lowest premium. I tried to buy some 10 oz silver bars over the weekend and the premium was about $4-5 per ounce (non-Engelhard) so I passed and bought some 90% junk instead.
I'm not sure. Most of the majors seem to have problems replacing their production with new reserves, and I think investors are nervous about them pouring their cash flow into the ground - just running in place with no real growth prospects because of their size. If they paid a substantial dividend I think the prices would be a lot higher. There are a few exploration companies I like, particularly UXG and RBY. Both look like they have substantial upside potential, but it's going to take a couple of more years until this becomes clear. But the risk is far greater too.
In my mind, and I am probably a minority in this regard, silver is money. The other day I had a dream I found a bunch of 2012 1 oz dragon coins, but the feeling I got was like I used to get in dreams where I would win the lottery. I've made the mental shift away from paper rectangles, and I am anticipating that will be commonplace before I ever need to get the value back out of my silver. This is because I budget how much I buy so as not to impact my liquid finances, and I buy with the intent to hold it so I will hopefully never need to sell unless I choose to. If I turn out to be wrong on the mental shift then I will just leave it to someone in my will or at the very least save it until I'm retired in which case I am still looking at 20 or 30 years down the road. On the off chance that things take a turn for the worse before I retire, I will be in good shape.
Good post and very similar to my feelings, 25 years from now I might sing a different tune but right now it is just money I save.
not to burst your bubble but those rectangles are what people rushed into and dropping the price of silver $10/oz... I do like silver ALOT but it seems the age of the gold/silver standard being of true value is kinda gone...when times are tough and people fear inflation get pm's..but at the very thought without real threat of deflation...the dollar is where you should be... I'm about 50/50 in cash/pm's now and I feel good about it only reason I got cash though is I sold a chunk of silver @$41 then took a large amount and rebought in but this time I bought "rare" silver that gains a large premium as I posted in another thread.
Just the flavor of the week IMO. Gold and silver are perpetually tasty. There's no reason that PM's have to outperform currency from this point forward, but something to consider is that if currency does lose the faith of the people (and maybe more importantly the big wallets out there) they couldn't possibly fit all their wealth into the small silver market unless prices went over $1,000 per oz. Otherwise supply would run out before they could spend it all. Of course silver is not the only metal that might be attractive in that case, so this is purely hypothetical. I do agree deflation is a very real concern and is the underlying factor behind the inflationary policies, but in that case it doesn't matter so much if metals go down if everything else that you need to purchase goes down faster. Sure in that case, dollars are better to hold, but if there is a heavy deflation it would be risky to assume that the established order would be able to continue with the status quo, and I'd be wary about anything reliant on their backing. I'm not saying any of this has to happen, and I certainly don't wish for that, but these are things I consider among possibilities and weigh in my thought process.
