I must admit I have been a sceptic of unallocated precious metal purchases but in recent times with storage and security being an ever present concern I am now adding unallocated to my stack. Would be interested to hear your views on unallocated too?
"Dill" is probably the most polite word I can use for anyone who thinking of making unallocated metal purchases; "excretia for brains" if I wanted to express it rudely!
Interesting viewpoint, and I guess you would have an interest in people only buying physical then? But in all seriousness why are you so against it?
yippe how does it relate to a ponzi scheme, when what you purchase is added to an unallocated physical stack, simply held at another premise?
There is a bit of confusion placed about around this.... Check out the recent Max Keiser interview around this. There is no standard definition of unallocated anywhere that I've read. So read the Terms and Conditions very carefully. 1) Make sure that legal title of the metal remains with you. 2) Ensure that unallocated metal accounts do not appear as assets on the holding companies tax returns. 3) Ask the companies offering the service how they ensure their liabilities are appropriately covered. Anyway you look at it though..... It's gotta be better than a bank account
Personally think it would be a better option to just dig a hole and throw some bars in that then to buy unallocated. Unallocated might be okay for trading in if your in and out but would not expect to be able to sell out them when prices go high as most places just would not have the ready cash for everyone to take profits in unison. It's no different than banking, the cash in the Unallocated is used for Business operations and only a fraction is made available for people cashing out at any one time. Unallocated to me means you don't really have a direct allocation of the metal and at the same time you don't really have cash waiting to pay you out when you go to sell either. If you do buy into it then it's really no different than buying a private bond as the payout on maturity is subject to the solvency of the other party. When I got done accumulating Physical I considered unallocated but instead bought into Silver Miners, exposes myself to more Counter-Party-Risk than unallocated but at the end of the day there is more upside potential and I have about as much ownership of the Metal as I would with unallocated anyway. I guess if you decide to go with unallocated then just assume that they are not all the same, you would want to be with a reputable place that has insurance guarantees and you have the up most confidence in their ability to remain solvent in any market condition.
Actually I trust many individuals, and as mentioned previously, have had unallocated for many years. But things have the propensity to turn sour very quickly in the current economic climate, and to be honest I think they will. Consider this, do you trust the government of the day, to not change the rules for their financial gain at your expense?
BB to store with gold I utilise a SDB at my bank, if I ever fill that with gold I will be king midas however with silver it doesnt take a huge qty to require a rather large space, especially with coins of various size. To go to a size that I now need will cost in order of $1500/year or an oz of gold. Also because I rent storing at home is not currrently viable. It's these reasons combined that has led me to unallocated.
It depends on how flexible the vendor is. If you want to buy (say an 100oz bar), but you can only buy 20oz at a time, then you could perhaps use unallocated as a way of averaging your silver price over a number of months. However, some vendors don't let you physically pull out the metal, and will only let you retrieve cash. This is an indication that they may not have full backing. You may also wish to investigate GSR swapping strategies, that if supported by the vendor, are a lot easier to execute with unallocated, than physical. I have done it both ways, it was more fun with the real physically metal, but I paid more for the privilege.
I am a fan of unallocated for sure. I have used PMDP previously and I found this worked very well. A bit to set up but once done very easy to buy and sell. A simple phone call. Saves the running around with SD boxes or the like and burying or keeping at home is just not for me.
+1 for PMDP. But mine is pool allocated (suttle difference from 'unallocated'). I chuckle at those who don't trust the system enough to hold unallocated, then recommend to place physical in the hands of a bank via safety deposit box. :lol: Then they quote the ol' cliche - if you don't hold it you don't own it. Irony IMHO.
Like CK said, check the Ts & Cs. I'd only consider unallocated where there is an option for me to take delivery of physical metal. If I have to sell back for cash, then no.
Yeah that was my first impression as well but when you break it down then an option to covert to Physical means nothing. All it is doing is combining the 2 steps (1st you sell the unallocated then 2nd you buy the physical) If they run out of Physical then this is not an option anyway. Plus you could always cash out of unallocated and then shop around for the physical elsewhere, the 'option' to covert to Physical is seldom the 'right' to covert to physical.
