Guide or tips for getting into 'silver stacking'??

Hi All,

my husband requested I research getting into 'silver stacking' as you all fondly know it as, as a new investment option for us. We are a young-ish (late 20s, early 30s) couple with excellent jobs, no children, and are saving diligently to buy a home while the market is on hold so to speak (we recently moved interstate so have been renting). I have a very small amount of shares I purchased when I used to work for a bank about 3 years ago, and apart from the savings we have, that is all we have as an investment for now.

I understand it is good practice to not have all your eggs in one basket as they say, and if it weren't for your site I wouldn't even have begun to understand some of the concepts talked about within this very interesting field of information/knowledge.

As we are considering buying our first 1kg bullion, (not now, but maybe in a few weeks), can anyone offer me any start-up advice regarding entering this field as a newbie?? I understand that buying silver is not a short term investment, and we are planning to, if it is correct to do so, to purchase our first 1kg, and then maybe each month or couple of months just keep adding to the collection (of course in line with existing budgetery limits, etc )

Does anyone have any handy hints or stories they can share of their first experience in buying silver? To be brutally honest I am really nervous about it, and I'd like to think that some weird freaky occurrence won't come about suddenly which would cause me to lose copious amounts of money (such as hyper inflation or some other such nonsense)....

Thanking you all in advance

 

Hi Pixiie, welcome.

I'm a newbie too, but I've been lurking on this forum, reading up on various things for many months, and from what I've gleaned so far - just start buying silver with whatever money you have, after paying for all the essentials. This is what I've learned so far:

Buy it for as close to spot price as you can get. Be wary of anyone trying to sell to you at below spot, as there could be something dodgy going on there.

Bars are good value, coins are a bit more expensive, typically. But then, coins have legal tender status, which can be comforting to some people.

Don't get sucked in to numismatics. That's a whole other investment class.

And get physical metal (ie: don't buy it "on paper"), store it somewhere safe and don't be tempted to tell people about it.

There is an excellent book called Guide To Investing In Gold and Silver, by Michael Maloney, which I read and it really helped me understand why precious metals are THE best idea, right now. If you want a copy, contact the guy who owns and runs this forum - GoldPelican. He is a top bloke and can source the book for you, if you can't find it anywhere else.

One other thing, hyper-inflation is (most unfortunately) not nonsense at all, but a very real situation that people in Germany, Russia, Argentina etc.. still remember to this day. More recently seen in Zimbabwe. Imagine taking a wheelbarrow of cash to a shop to buy a loaf of bread. Imagine using cash as toilet paper because it's so worthless. I'm sure no one in those countries ever believed it could happen to them, but it did.

All the best to you.

 

And welcome

 

yep, the first thing you want to do is read that book by michael maloney. itll relieve any doubts at all you have about buying silver.
welcome.

also hold out on buying that house, its general consensus australia is still in the biggest property bubble its ever seen.

 

Welcome Pixiie

I wouldn't wait a few weeks to buy your first silver bar...things looks set to go up this month. Well done on discovering silver while its still in stage 1 of 3 in its bull run. Good luck.

Oh and if you want some sought after coins that are worth more than what you pay as soon as you buy them buy some 1oz silver dragons while they're still for sale at the Perth Mint.

 

Pixiie, welcome to the forums

Before I share my thoughts on this, bear in mind I still consider myself a bit unknowledgeable in some areas myself - but let me share some thoughts

In my mind, there are a few reasons one might want to stack precious metals (note, I'm not limiting this to silver, perhaps some gold might suit you as well). These reasons - broadly - are as follows:

(1) You love the numismatic aspect of the precious metals, that's your main focus, but as a result of pursuing it, you realise you're building a store of silver & gold, which is ultimately money, subject to spot price, and your numismatic "premium" (see below)
(2) You don't mind the numismatic aspect of the precious metals, but your main focus is to diversify some of your investment into precious metals. Numismatic premiums are a nice bonus if you happen to come across them whilst stacking
(3) You believe the SHTF (crap hitting the fan) is coming economically, and you realise fiat (see below) currency is going to go the way of the dodo, and you want to get and store value in precious metals whilst you can

Before we go on, let me explain a couple of terms I used above.

"Premium" is the actual amount over and above the bullion value of the coin, which is generated or set by quality of the item, and rarity of it. As an example, you will find buying any year American Silver Eagle will, pretty much, result in the same premium, that being a few dollars over the spot price. American Eagles are quite common, have the same design from year to year etc. On the other hand, buying a Chinese Panda is a different ballgame. Limited mintages, and some in very low numbers, lead to some of the years coins being highly sought by collectors, and the price of some years as a result is many times the spot price of the metal in the coin. In all cases, the amount over the spot price is the "premium" on the item.

"Fiat" simply means currency as we know it today - dollars and cents, pounds and pence - any legal tender defined by a government decree is fiat.

OK, with that out of the way - it's time to sit back, and think yourself - why are you stacking, what are your personal beliefs? This is actually more important than many who are "new to the game" may consider in my opinion, because it will determine for you what it is you should be looking for, buying, and stacking. And, I should point out right here and now - no one reason is any less valid that the other - silver stacking (or precious metal stacking) is a personal thing to a large degree.

If you're into the numismatic side of things, then you should be on the lookout for Yennus coins and items that are likely to provide that. Anything that isn't "common" would serve you reasonably well to excellently, depending on the future (yes, to a degree, crystal ball stuff - but that's true almost irrespective of what you're looking at in this game). Coins with low mintages from Perth Mint (Lunar series etc), Shanghai Mint (Panda series) are two that immediately spring to mind, but the list surely is much longer than that.

If your interest is diversification, then I would look toward items that represent the best "bang for your buck" - that is to say, items that have lower premiums, so you end up with the most silver for your dollars. If the numismatic side is of mild interest, then by all means snap up any bargains you may come across in your searching (Pandas etc), but don't necessarily focus on it. Splurge, once in a while, if you like to think of it that way.

If your interest is SHTF stacking (I will say that this is my focus), then you want a mix of things. You will generally want to look for "best bang for buck" deals, paying lower premiums, so you increase your stack at an efficient trade for fiat, BUT (and this point I overlooked at the start), you will also want to put aside some smaller denomination/size units. Consider that in an economic collapse, for some period of time, the method of trade may become bartering. Consider too that precious metals will likely be worth a considerable amount to trade with - this is true even now - one ounce of silver would comfortably buy 10 loaves of bread, if not more - but would you buy 10 loaves of bread at once? Supplies will be limited, so the possibility of even finding one person with enough goods to trade for one ounce of silver may be hard - now think about 10oz, 20oz and 1Kg units

Hope the above rambling provides some food for thought!

 

Thank-you all so kindly for your tips.

A question I have: if the AU price of the silver is based on the base rate of the US dollar figure, what happens when (or if) the US dollar goes under? How is the value then represented if the base currency is gone? Or, is there a secondary unit of value measurement for metals?

Also, whilst we (my hubby and I) are still in the wealth creation as opposed to wealth diversification stage of our life, is it better to continue to build slowly on metals as, would be considered with a regular savings account? (I mean, in terms of methodology of wealth creation) He works contract work in mining operations (not with a mine yet though), but is looking to move directly to a mining company for work. With our shares we have them setup to reinvest dividends into the purchase of new shares (the ones I got when working at the bank), and our savings are topped up with about $2000 a fortnight - this was where the idea came to start buying bullion because we wanted to have another 'just in case' system setup, and, we don't know of anyone in our peer group who is currently doing it so we also figured it may be beneficial in the long term if we were to invest in these relatively early stages of buying....plus, even banks these days aren't really secure, but we keep the money there to show regular savings history for a future home loan...

I like the idea of starting off with some smaller ones, the ounces, but my husband would want to buy the kg ones first, can you tell who the conservative one here is?! LOL

I will also definitely try and locate some more reading material regarding the start-up process. I looked at a few sites yesterday - such as the Perth Mint and ABC Bullion, BullionMark & GoldBullionAustralia - what is everyone's experiences with these companies/organisations? What are people's preferences for keeping the bars at these locations as opposed to at home...

Sorry I keep asking more and more but it's just so interesting and such a huge new step, I just want to make sure it's the right thing

 

The only "dumb" question is the one you don't ask ;-)

Bear in mind, I am stacking for SHTF (my personal belief). As a result, if I can't touch my metal 24x7x365, I consider it subject to confiscation/lockup. So, I trust only 2 people with my metal - myself, and my wife. And, obviously, I keep it in very accessible places.

 

Hi Pixiie,

New here too but have been immersing myself in the knowledge of Mike Maloney. He's the man. Check out these links, they will give you some insight. And then of course. Order the book so you have it on a Friday, because you won't put it down.

Enjoy the Journey!

http://www.youtube.com/watch?v=E5VNAEmmBQM

http://www.youtube.com/watch?v=tj2s6vzErqY

- Even though I'm Team Jacob, I stack silver...

 

Welcome pixiie.

If you're in NSW, consider coming to the next SydneyStacker's Meet at the end of the month. You can find all manner of bullion (Junk, Standard and Premium) available, and often at the best prices.

A 1oz Silver Queen Mother went for a steal! Other bullion coins were sold at spot or below.

You can also ask a lot of questions to people with differing opinions and backgrounds.

I think Midnight Man has summarized the different perspectives pretty well.

I started with the usual mixed bag of sovereigns, kooks, silver eagles, pre-decimals, etc but found that when I needed to sell, I couldn't find a market for them, or a decent price for them... Especially the sovereigns, I started with the belief that these were Premium bullion, but I had to offload them at spot...

When my son was born, I bought a few Pandas, and within 6months I was making more from the Pandas than I was from anything else.

They say that bullion doesn't give any yields (e.g. interest, dividends, etc); for Junk Bullion and Standard Bullion this is mostly true - BUT my Premium Bullion stack (mainly Pandas) have yielded returns greater than the increase in spot.

A 2009 1oz Panda was only $18-$19 back in 2009. Now they are worth at least $90-$100 (equivalent to 2x 1oz Standard Bullion coins).
A 2010 1oz Panda was similarly priced around the mid $20s in 2010. Now these are worth at least $60 (2x 2010 1oz Pandas can often get 3x 1oz Standard Bullion cons).

I think 2011 1oz Pandas are a fairly safe play to try out. At wholesale prices, they are only 7% above standard bullion, and if history repeats, their returns should be much better than if you had gone with standard bars or coins.

 

Hi pixlie,
I'm relatively new at this myself. I would say stay away from kilo bars, (at least at the start) buy some 10 oz bars they're very liquid and the premium is much better than 1 oz. Rounds. Kilo bars are good if you're going to be making large purchases and tying up lots of capital in your stack.
Buy some gold, silver while I personally and a lot on this site believe has greater potential for gain; it also is much more volatile. Having gold and silver together gives you a little more security and diversification.
I'd say instead of a kiilo of silver (around 1400 - 1500 dollars) maybe get a 10 oz silver, 10 x 1 oz. Silver coins/ rounds (kooks, ases, maples, philas, pandas, lunars) etc. And a 1/4 oz. Gold coin or 10 gram perth mint gold bar. It'll be around the same price, and you'll have a good starting exposure to both gold and silver.
I started all in on silver and part of me regrets I didn't start buying gold when I started buying silver. I've done well with both and I think they compliment eachother well. Plus if you buy a few smaller pieces then both you and your husband have some pms to fondle.
All the best.

 

I'll offer some advise on the emotional side.

I purchased my first batch of gold and silver back in late 09 with a Long Term view. Never heard of Silverstackers before nor read Mike Maloney's book, purely from gut instinct.

I didn't even bother checking the price history and 'expert' views. I was dead set on buying some cold hard metals. Purchased the metal, took delivery and stash them on the bank deposit box, took one kilo silver bar home as a fancy door stopper (true story!).

Before I found this forum, I didn't know and care about dips in PM price as I have a long term view. Then I found this forum and the emotional roller coaster began. This forum has made stacking more colorful, not to mention knowledge gain just by lurking in the forum alone. But the roller coaster ride can be frustrating and not necessary.

Moral of the story is, trust your instinct, the first one that comes out is most likely to be the best one for your situation as it is unadulterated by other view an opinion. Use this forum as a TOOL; finding out different type of bars and coin, close to spot bullion offer and most importantly, forming a view for exiting the PM vehicle when the time comes. At the end of the day you are the driver of this vehicle.

Happy Stacking!!

 

Hi.

You and your husband are very smart.

Precious metals are THE investment / hedge against inflation / wealth protection asset of this decade and damn nice to hold in your hands!

I'm relatively new here as well and over the course of the year, have a mix of coins, 1oz, 10z and 1kg bars.

My two cents: hold off on buying that house, the Australian housing market has yet to deflate on par with the rest of the Western World.

This site is a great source of information relating to any question you might have - Don't be afraid to ask.

Also, if you have time, make sure to view any video or new items linked within these hallowed forums. Education is the key.

And remember - "Every cloud has a SILVER lining!"

 

In regards to ABC Bullion, I've had some favorable encounters there. Their prices are reasonable. The only drawback is the wait time. I have had to wait 2months for delivery of 1KG PAMPS. That was a long time to wait. But they did tell me at the time of purchase it would take that long.

I haven't tried the others yet.

If you're in a rush, you can probably buy PAMPS on silverstackers for slightly cheaper than ABC, and get to carry it home within a couple of days