Sorry, I meant there must be the option to take delivery in addition to acceptable Ts & Cs and the company having a history of reputable dealings.
I am going unallocated with Goldstackers for my SMSF. Gold:Silver swaps become possible, there is a small fee but better than postage and less hassle. No worries that I have the right 'type' of PM. Insurance sorted. Storage is compliant. Fairly trustworthy I would say, one industry super lost a lot of my savings and my current industry super won't let me do anything with the funds, it's almost as if they don't think it is my money. At least I know what the owner looks like and have spoken to him. I have no space for it at home and want to keep it separate from my own stack.
Easy - the "storer" knows that probably only around 1 in 10 (if that) will ever "cash in" their physical at any given time, and so he only needs around 10% of the inventory to actually be there at any given point in time. He can use the new recruits' money to pay for those who wish to sell/cash in their allocated PM- as opposed to actually physically selling the PMs which he is supposed to have had. If you cant touch it - it aint yours!
Not discounting any of the very valid concerns detailed above. I just wanted to point out that unallocated coupled with a good (spot price) buyback and low buy spread, unallocated can be a great way to play the gold to silver ratio.
Again ... Reasons for reading the terms and conditions. Fractional Reserve Banking is bad ... regardless of whether it is backed by anything of value at all. Any bank ... almost by definition is a supplier of unallocated stuff, it's just the percentage and the intrinsic value of what is being stored for you that changes. The first banks were 100% backed by physical gold. Since then they have devolved into what we are stuck with today. I prefer fractional reserve systems based on something of value (i.e. Gold) than a fractional reserve system based on worthless and unredeemable pieces of paper. I also prefer my fraction to be 100% and not 10% ... which is why I'll only deal with non-fractional offerings. Yippe is correct on that one.
First I have different views w.r.t. my mandated Govt super vs my personal super. If I'm able to access my Govt-mandated super in any way that is significantly different from an capped allocated pension I'll be pleasantly surprised. Consequently happier to take some additional risk w.r.t. this stash. Not stupid enough to put it into any storage operated by the banking system though. To my mind Perth Mint has always been a completely different beast because they are a Government entity and a refinery as well. Hence, hopefully they are one of the last places possible for loss due to fraud/bankruptcy/etc (except by the Govt itself of course - but in such a case my mandated super will probably be gone anyway). On Friday Dogmatix posted a URL to one of Bron's articles which changed my mind RE their unallocated vs allocated options. Worth a read. http://goldchat.blogspot.com.au/2008/11/australian-gold-confiscation.html
You should look into the goldstackers unallocated accounts: "Redemption is simple - just order the items you wish to redeem as a normal purchase, and then email us to let us know it is a redemption - the current retail value of your unallocated holdings is then applied as a credit towards the purchase with no loss of premium. Only the difference in premium between unallocated and physical is payable. You can also sell back your unallocated at any time for cash at spot value." source: http://www.goldstackers.com.au/store/unallocated.html Likewise Jislizard. Having looked high and low across Australia for a better unallocated account I couldn't find one
Try dealing with decent SMSF sized quantities of silver (say $100k) and you quickly see the benefits of outsourcing storage via an unallocated program. Even the basics like finding enough SDB space to hold it, and physically carrying it to a facility, and then paying the equivalent of 1% or more pa for storage and insurance. Costs like just shipping the stuff. Talking 100kgs+ etc posted or couriered. As CK pointed out, there is no standard definition of unallocated. The term ranges from covering ETFs, certificates, online pools etc through to 1:1 physical backed offerings. Starting to see more and more dealers in the Australian market bring offerings to market - its funny to see a website have a warning one week about not buying unallocated, to an announcement the following week promoting their new unallocated product Creating unfunded metal liabilities in a bull market is a sure path to failure. Hope everyone else is doing it right.
I'd say that unallocated, even if the PMs are legally yours, is still a risk. MF global much? I know it is not the same, but it proves that people can get away with 'illegalities'. Also, it doesn't matter if they 'get away with it', but what matters is if you don't get your PMs. Can you imagine your unallocated PMs being compensated to you...in cash. "Sorry, we're unable to give you your PMs, but here have the cash equivalent". I can think of a few scenarios in which such compensation would be less than ideal. Also if it ever came to 'confiscation' (depending on your view), unallocated PMs are fair game. Edit: After reading GP's comment above - that is a fair point to consider, PMs in large quantities. If this is you, then unallocated may be a decent partial option (IMO).
Cheers, yes, I am trying to diversify, hard assets in my personal (i.e. non government mandated) retirement plan, these I just sit on. And for my new SMSF (clawing back the money from my industry superfund, the component that I can get to at least!) I want to do some trading with PMs. Physical is a bit awkward for that but I don't fancy paper silver. The only drawback is in the level of trust you have in the person holding your gold.
Unwise.. unallocated is the bottle that physical can never break out of.. every time a company creates paper contracts they are dilluting the actual market.. its a derivatives thing.. Even if they are issuing them at a 1:! holdings ratio then why not just buy and hold? you are just encouraging companies to issue my papaer than silver they have on hand.. and that IS the problem with Precious metals in general.. to much paper trading as the real thing.. to easy to issue a bunch and create excess supply over demand. 1for1
True, unbacked silver and fractional reserve bank accounts are nothing but trouble. Buying and holding a SMSF worth of silver is not without its problems, least of all I intend to buy and sell the stuff as well as do gold to silver swaps. This stuff is not easy to do fast trades with and costly to move around. My holdings are backed 1:1. I will at some stage convert it back to fiat at spot price, and not when the end of the world is upon us. With any luck the spot price will rise and I will never have to pay to have it fabricated before I sell it back, lower premiums mean I can get more silver held for me. I am not all-in for unallocated, this is just one of the more active areas of my holdings, the property and personal physical stack aren't going anywhere and aren't generating any cash for my retirement. Hopefully easier tradeable PMs will mean I can buy and sell, something I am not doing now, when silver went up to the high $40s I was wondering how I was going to get around to shifting a lot of my silver, I took too long (photographing for auctions, writing the spiel, signing up for auctiva and trying to work out how to use it) Silver crashed before I got around to it. I certainly can't be bothered to sell physical if silver goes up $3, but it might be worth it if it is paper silver. Same goes for Gold to Silver swaps, I did one once, it took a while to work out the deal, sort out the premiums on both sides of the deal and then postal cost and trips to the post office. I was happy with the deal but I wouldn't bother to do it again.
Those were the same fears that have prompted me to go the SMSF route, and I hate having to read forms
While SMSF's are 'safer' wrt greedy fund managers milking it, i'm afraid that SMSF's provide NO added BENEFIT wrt protection from the coercive state - and that to me is by far the greatest threat to the money in your SMSF! they will find a way to keep you from accessing it ... cos it's just another tax in reality.
...but, but, but aren't industry super funds run by union officials who aren't in it for profit? If you can't trust the union officials to conduct their affairs with members money in a completely open and transparent manner with accounts set up and overseen by scrupulous, highly respected and trusted lawyers who can you .... Oh never mind. [Edit: Oh you meant because it's in a Government regulated account? But, but aren't Government officials making regulations for your benefit? If you can't trust the Government to conduct their affairs with people's money in a completely open and transparent manner ... Oh f*** it! Jislizard - take it all out now, put it into an SMSF that invests it all in a wine cellar. Wine that happens to go off in, say, 5-10 years and hence happens to "lose" 95% of your capital by the time you reach retirement (spoilage is the term I think ).]
