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<p>[QUOTE="medoraman, post: 3214536, member: 26302"]I have never been very willing to pay high premiums, but the truth is that when you go to sell, the spread between bars and govt issued bullion tends to stay intact. Buyers discount bars more severely versus spot than govt issued bullion, since bars have higher risks associated with buying them and knowing they are pure, good silver. So the premium for coins is not thrown away money, it is money that tends to stay intact in the buy/sell spread.</p><p><br /></p><p>One could argue to buy bars, since any premium for gov't coins is money not buying more bullion, and that is why to buy bars. Maybe this is a valid point, but it has to assume it is large enough to be a concern and a buyer of just bar silver can easily be found.</p><p><br /></p><p>My "solution", (really maybe just a lazy hoarders answer), is diversity but concentrating on premiums. I will buy world silver, US junk silver, or gov't issued .9999 depending on the premium demanded. Mostly its junk US silver, and one could argue I buy world silver for "collecting" fun. However, I have bought ASEs when the premiums are very cheap, (way less than $1 a coin), and others like maple leaves at spot. For those prices, the modern is the best value, but if they want $2 premium for ASE and junk at spot, I buy junk. For world junk I never pay over spot, but can be tempted to buy at spot if I like a lot of coins in there. I do own some bars, old cast bars like Engelhard that I bought just because I like the look of them. I do not consider them "bullion" in my sense of the word because I paid a premium for them. Since I paid a premium, I consider them "hobby" coins and buy them with throwaway "hobby" money. </p><p><br /></p><p>Investing is investing, (cold, calculating, and not concerned with "pretty"), and hobby is hobby, (jeez that is a pretty thing I will throw away this money I have budgeted to waste on pretty things I want to own). This is where people get into trouble NEVER commingle the two. Most people commingle these two, and basically waste money on "pretty" bullion, thereby minimizing any potential profit. If it is a choice between buying a stock and investing in bullion, you have to ruthlessly get the best bullion deal you can. If you think its pretty, then fine, buy it as a hobby but NEVER take money out of your brokerage account to afford a pretty "hobby" coin. </p><p><br /></p><p>Is any of this "right", heck I don't know. It is simply my reaction to buy/sell spreads I have seen, and the fact I like owning smaller quantities of silver than 100 or 1000 ounces bricks, as again it gives me diversity in selling. Way more potential buyers of junk silver or individual ASEs in the future than a huge doorstop bar. Diversity may not save you, but it usually does not hurt you and simply gives you more options, which is always good.</p><p><br /></p><p>For gold I never buy fractional unless it is the same price as the one ounce. Fractional premiums are a whole other animal, and those premiums you WILL almost always lose when selling. So I always refuse to pay fractional premiums and if necessary wait until whole units can be purchased before doing so. Same is true of any PM, NEVER buy fractional ounces because the premiums will destroy your returns. Only buy them at identical premiums PER OUNCE as whole units.[/QUOTE]</p><p><br /></p>
[QUOTE="medoraman, post: 3214536, member: 26302"]I have never been very willing to pay high premiums, but the truth is that when you go to sell, the spread between bars and govt issued bullion tends to stay intact. Buyers discount bars more severely versus spot than govt issued bullion, since bars have higher risks associated with buying them and knowing they are pure, good silver. So the premium for coins is not thrown away money, it is money that tends to stay intact in the buy/sell spread. One could argue to buy bars, since any premium for gov't coins is money not buying more bullion, and that is why to buy bars. Maybe this is a valid point, but it has to assume it is large enough to be a concern and a buyer of just bar silver can easily be found. My "solution", (really maybe just a lazy hoarders answer), is diversity but concentrating on premiums. I will buy world silver, US junk silver, or gov't issued .9999 depending on the premium demanded. Mostly its junk US silver, and one could argue I buy world silver for "collecting" fun. However, I have bought ASEs when the premiums are very cheap, (way less than $1 a coin), and others like maple leaves at spot. For those prices, the modern is the best value, but if they want $2 premium for ASE and junk at spot, I buy junk. For world junk I never pay over spot, but can be tempted to buy at spot if I like a lot of coins in there. I do own some bars, old cast bars like Engelhard that I bought just because I like the look of them. I do not consider them "bullion" in my sense of the word because I paid a premium for them. Since I paid a premium, I consider them "hobby" coins and buy them with throwaway "hobby" money. Investing is investing, (cold, calculating, and not concerned with "pretty"), and hobby is hobby, (jeez that is a pretty thing I will throw away this money I have budgeted to waste on pretty things I want to own). This is where people get into trouble NEVER commingle the two. Most people commingle these two, and basically waste money on "pretty" bullion, thereby minimizing any potential profit. If it is a choice between buying a stock and investing in bullion, you have to ruthlessly get the best bullion deal you can. If you think its pretty, then fine, buy it as a hobby but NEVER take money out of your brokerage account to afford a pretty "hobby" coin. Is any of this "right", heck I don't know. It is simply my reaction to buy/sell spreads I have seen, and the fact I like owning smaller quantities of silver than 100 or 1000 ounces bricks, as again it gives me diversity in selling. Way more potential buyers of junk silver or individual ASEs in the future than a huge doorstop bar. Diversity may not save you, but it usually does not hurt you and simply gives you more options, which is always good. For gold I never buy fractional unless it is the same price as the one ounce. Fractional premiums are a whole other animal, and those premiums you WILL almost always lose when selling. So I always refuse to pay fractional premiums and if necessary wait until whole units can be purchased before doing so. Same is true of any PM, NEVER buy fractional ounces because the premiums will destroy your returns. Only buy them at identical premiums PER OUNCE as whole units.[/QUOTE]
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