Hi All, I'm looking for some advice. I have just recently started stacking (about a month ago), having read the "Buying Silver in Australia" post from goldpelican (really informative) I know that I want to buy (after all, I like shiny things) and have some idea what is out there. But I still don't know exactly how much of my stash I want to keep in bullion. So far I have about a 50/50 split between coins and bullion (both from Perth Mint). I'm looking at putting a small amount of each pay into silver, but I have to ask myself if this is the right way to go about it. Does anyone have any advice to offer a newbie about how to structure a stack? What sort of coin to bullion ratios are out there, and what's the reasoning behind them? Does the ratio change as stacks get bigger? Is good to get all your silver from the same mint, or do you recommend buying from different mints? And most importantly to all the above, why? A lot of questions I know, but I'm hoping that answers to these questions will help me with figuring out how I want to set this up. Thanks
G'day KMGeneral. I have no idea what you're earning so a small amount of silver each pay would, if I had to hazard a guess would be between 5-20 ounces. I'd buy Perth Mint coins. If you choose to buy the 10oz coins (dragons recommended) it will be cheaper than buying 10x 1oz coins. Id go with the 10oz option. If your rolling in the cash I'd buy bars of any sort for as close to spot price as possible and a smattering of Perth Mint coins each pay. ..The reason I say Perth Mint coins is that they are legal tender, highly recognizable and there is a chance one day we'll be able to buy stuff with them directly from shops for the value of the silver content (like has happened in some states in the US.) Though they do cost more than standard silver rounds. Concerning bars, it doesn't matter if they are all from the same mint or not. At the end of the day you can't go wrong buying as close to spot as possible to get the maximum metal for the money (bars, buffalo rounds etc). Although I can't resist paying a few bucks more for a tasty dragon coin with great numismatic potential.
Doesn't matter just buy whatever takes your fancy, as long as you don't pay a big premium If you like how bars look get those - more bang for your buck - well for 10oz and above at least If you like coins, you can get 10oz and kilo dragons for just a small premium above bar price
My advice starting out is to forget the 1oz coins and buy based on premium. Maximise your money and get your stack started. The best way is to go bars (no smaller than 10oz) but if you want coins then go 5 or 10oz. Once you have a small stack behind you (at least couple of hundred i reckon) then play with the smaller coins if you want them. My recent experience was that the smaller coins sold the fastest but you should build a base first to make best the rise in spot silver. Avoid numismatics but others here differ. Have fun.
Your buying strategy should directly reflect your future selling strategy. Don't pay big premiums on items you think you'll want to sell in a hurry and don't pay small premiums on things that other people won't buy in a hurry. For example, if you want to take the semi-numismatic approach, you might want to outlay some extra on high grade pandas but it might take you a while to find someone who'll buy them for three times what you paid (great return if you're prepared to wait for the right buyer). Conversely, you can probably find some U.S. 40% junk silver for spot or less but you'll only ever be able to sell it again for spot or less (which might also be a great return if spot has gone up). Just think "who's going to buy that when I want to sell it?" and that should give you an idea of what you should be stacking.
Get at least 20 oz in 1 oz coins ( Maples, Kooks, ASE's, Philharmonics ) The rest should go into 5 & 10 oz bars or coins. Also have up to 5 oz in 1966 50 Cent coins. Once you have more than 150 oz, than swap some of the 5 & 10 oz bars into 1 x 1kg bars or coins, keep repeating, when you have at least 3 x 1kg silver, than swap up to 1kg of silver into Gold ( irrespective of where you think the GSR is headed). Keep repeating.
If we get an 1980s even where silver hits a huge peak; buyers will only be interested in getting silver not caring about lunars/pandas/koalas/maples in my opinion (many will disagree). In that moment silver will be expensive and even predecimal might have a small premium. The smaller your silver pieces the more liquid they will be. I would suggest to stack as much as you can in any type of silver. Once you hit a mark that you think you are comfortable with which may be 200/500/1000 oz start experimenting with coins you like/think have great potential(that is pandas or lunars). Nothing against pandas people; but with pandas i'm betting on premiums which are based on people's tastes while I consider myself more a silver stacker with main objective being to increase my stack till I reach that comfortable level where I can experiment more
Wow, thanks for the advice everyone geewiz, you are right on the amount. Looking at roughly 10oz a pay, more if i can afford it. I figure it's enough to give me a small stack without too much hurt. Naphthalene Man: I must admit that I like the feel of a 10oz bar, I got one from bullion bourse and it just feels... right. Not pretty (due to some minor discoloration on the top), but I couldn't stop smiling. On that note I think that I might look at one of the Scottsdale 10oz stackers next. hotel 46: looking at life (savings), but if there was enough profit in selling to enable me to buy some land without a mortgage... well here's to dreaming. THUCYDIDES79: that does sound like a nice and really balanced way to make a stack, and it looks like it is structured for slow constant growth. I have to imagine that the 1oz and 50c coins are more for quick liquidity or trading. Am I correct? Again, thanks for the responses guys. You have really got me thinking
Many will disagree with me, but when I read posts like THUCYDIDES79's I think it's too much of a hassle. After all, I have life outside of stacking and don't want to be glued to spot charts all the time. Argentum is right. When you sell, most of the time you cannot recover numismatic premiums and small size premiums. Sells tend to gravitate towards the spot price. That's why if you're not going to make PM trading as your second occupation, then just try to minimize the premiums and stack whatever is more liquid. It means bars or coins in bulk quantities from recognized vendors. Most of the time if you buy 1oz coins in bulk the price will be very close (and sometimes even better) than 10oz bars. So, just save enough in your term deposit, then buy a box. Very simple and no need to chase gazillions of punters for sales or swaps.
Well, if your stack is going to be lets say 200 oz of silver - why would you want to be in a position ( at any one time ) where you dont have any silver in smaller sizes ( thus 1 oz coins & 50 Cent pieces) yes, they are for liquidity and for trading. 200 oz of silver would currently cost around $6500 - and imagine paper money existed in any denomination ( ie. $500 banknote , $1000 banknote, $5000 & $10000, etc ) Imagine you go to the bank and want to cash out the 200 oz of silver ( $6500 ) - and the teller asks you in what denominations you would like it? In this case, it would make sense ( once again imo ) to have it 2 x $1000 8 x $500 3 x $100 3 x $50 5 x $10 This method of stacking, will not make you glued to the spot charts, you just keep buying 10 oz lots every pay, and than every 4th-6th pay, you make a little adjustment upwards ( by swapping some 10oz for 1kg bars. Also, regards just saving in a term deposit till you have enough for a box ( around $16k ) - makes sense ONLY if SPOT will remain stable AND and the economy remains stable. And the stability of either one can not be guaranteed, and not only that but the instability ( especially of the economy ) is just a question of time when it will happen. To give you another analogy for saving $16k till you can buy a box. Thats like insuring your house against damage only around Xmas period when the storm season hits, and as soon as mid Jan arrives, cancelling the insurance, till Xmas comes again.
I agree that a whole box of 500oz may be too much and too long to save for. But 100oz is about $3500 these days, which is feasible to save over a couple of months even for a person with an average income. All the more so for a married couple. Most shops will offer you 100 coins for about the same price (or even slightly better). As an example, look at the link that Loxmyf posted. They offer 10oz bar for $353.20 ($351.20 for 9 bars). Now, many shops will offer you 100 of 1oz coins for ~$35.5 or even cheaper.
If you want to put a small amount away each pay may I suggest having a look at http://www.goldstackers.com.au/store/ ? You can buy unallocated gold & silver and when you've accumulated enough grams / ounces you can convert them over. You could also buy the coins you're after and put them in their mini allocated storage until you've got enough to justify postage (I think they do pick up as well?) Big A.D.'s advice on buying based on your future selling strategy is very sound IMHO. Buying based on the theory "silver is silver" is fine as long as when it comes time to sell buyers agree. However I think that 999 silver of well known types is the safest form of silver. Being in Australia Perth Mint branded silver should (and I stress this is just my opinion) form the vast bulk of the average Aussie Stacker. IF you're an American Stacker then you've got more choices (lucky buggers) American Silver Eagles, Buffollo's etc. Now I'm a small time stacker so this advice may not suit. I'd use goldstackers to buy up silver until I reached the weight limit for postage. You can buy unallocated then convert it over to 10 ounce coins if that's your thing, or you can buy individual coins (I really like the 1/2 ounce, 2 & 5oz Dragons). I personally think that 100 ounces in coin form, preferably Perth Mint and less than 10oz size, is a nice base to work from. Once you think you have enough coins then move onto the bars. Again, it'll all boil down to your sell strategy. I'm planning on selling mine piecemeal. That way I don't have to get my timing exactly right. Whilst I'm at it I put in my two cents regarding gold. Buy Perth Mint, AGE's, Krugerrands, Maple Leafs and Sovereigns. Buy them as you can in whatever size you can. If you have to much fractional then you've got enough fractional Start saving up for the full ounces (they're very nice). And finally. Buy from trusted sources (aka site sponsors) until you are happy that you can tell a fake from the real Mc Coy.
Syd888: The thing is, with the exception of spot drastically moving I don't plan on chasing it. Just finding a place with generally decent prices and then buying 10oz or so off them each pay (depending on what is catching my eye at the time). That may change and I won't stop looking around, but I'm not going to obsess over it. It's more of a long term savings thing. THUCYDIDES79: Makes perfect sense Loxmyf: oh, very nice. But I do notice that the Scottsdale 10oz is $10 cheaper on Bullion Bourse (at time of writing Scottsdale = 342.44, SilverStackers = 353.20). I had trouble finding postage costs on GoldStackers, but I have to believe that they are about the same as from BB. Nugget: I really like the idea. Would probably go mini-allocated for silver. For gold however... the un-allocated sounds perfect. Thanks Selling strategy has been mentioned a lot and it's made me realise, I haven't put ANY thought into it. Honestly, NONE. I guess it would probably depend on my needs and the price at the time... Guess I'll have to think on this.
