Investing in silver (and gold). Where to start?

I

iliria

New Member
I have just started in this area and was wondering if there are any sources of information that could start me off understanding the world of investing in silver (or gold). I am not aiming for short term investment so i dont expect to make a profit within a year or two. However i dont want to have to wait 10-15 years before making a profit either. :)

With this in mind, am I best buying coins or bars? I'm aware that coins carry a premium because of having been designed, minted and so on however you dont pay tax for them. Hence why I ask the question. If in the future I decide to sell is there a specific way of doing this? Or do I have to sell through places like ebay?

Is investing in silver the same or more profitable than putting the money in saving accounts?

Any advice to get me started would be much appreiated.
 
Iv only been doing it for a couple of years and dont have the experience that most of the others have on the forum but what iv learned so far is if you buy purely bullion bars and generic rounds then try and get as near spot price as possible because thats what you will be selling them for. If its rounds with a premium get ones with declared mintages like perth mint lunars and hope for appreciation
 
Just out of interest whats the sentiment about silver in uk these days as im going to scotland soon and wondered if it was worth taking some bars and perth mint issue to sell if i could get a decent price
 
I started in 2010 at $17 spot. I bought some bars but sort of regret it, My strategy is a form of hedge and how you play it should reflect your belief in where silver is headed. If you feel silver is going skywards then just buy 1oz generic cheap rounds, say buffalo. If however you feel that silver will trade sideways or upward you may want items like limited issue say Perth Mint Lunar series or Kooks or Koalas. https://www.youtube.com/watch?v=W8bdpYJe9ps This is my thoughts and if you watch the other silver vids i explain my strategy and i give examples of what has done well and what has not.
 
Welcome iliria!

I've been stacking for three years now.

Best advice is to educate yourself and not jump into any strategy too quickly. Stacking requires patience, discipline and the ability to keep your emotions in check. Most of all you need to read, listen and then make up your mind as to your own strategy. Youtube is probably the best resource for learning about stacking, along with forums like this.

I can pass on a couple of things I've learned since I started out:

1. Investment? Speculation? Saving? Investors like Warren Buffet don't like PMs because they don't pay a dividend. They are just a shiny lump of metal. I don't consider it an 'investment' for this reason, but this is a common point of debate. For me, stacking is simply saving money. It's an insurance policy you can sell back at any time. Sure, you may be able or lucky enough to buy low and sell high and make a profit, but this is probably best described as 'speculation'. Don't expect to get rich from stacking, no matter what the pumpers say. If the price of gold and silver skyrockets it will be due to the rest of the economy being on it's arse. A modest stack makes an excellent 3-6 month emergency fund and should be a relatively small proportion of your liquid assets (5-10%).

2. Build a foundation for your stack based on common, low premium products. It's better to start out buying some low premium generic silver and gold bars or coins. Stay as close as you can to spot. For silver, in my opinion it's not worth buying generic 1oz coins (and especially not rounds). Buy 10oz, 1kg or 100oz bars with well known brands that you can sell easily if and when you want to. Once you have built up a decent sized stack, take a look at some "semi-numismatic" coins like 1oz Perth Mint Lunar series or Chinese Pandas that have a strong track record of premium growth. These can be bought yearly on release and 'flipped' after a few years as a strategy to create a self-growing stack (with profits used to purchase more low premium silver/gold). Avoid the vast majority of novelty/collectable coins and rounds (unless you just like to collect them as a hobby) as these are usually a waste of money and very hit and miss when it comes to resale.

Good luck mate!
 
Thank you guys for your very helpful advice so far. It sounds like the world of silver and gold is not as simple and straight forward as it might first seem. I was half expecting that to be the case (if it was simple everyone would have been on the bandwagon).

I started this as a hobby thanks to the Queen's Beasts coins which I will continue to buy because I like the subject they're based on. I intend to buy the silver and 1/4oz gold versions. The price, especially on the silver coins seems to be fairly close to spot.

The semi numismatic coins are something which I would like to consider. However there seems to be a huge variety out there. I know that Perth Mint Lunars, Chinese Pandas and Kookas have a good track record in terms of price increase through the years. What else is worth considering? Would Royal Mint Lunars, Silver dollars, Turtles and Brittanias be worth considering? In silver that is.

I have noticed that thorugh the years Gold seems to have done better than silver however due to it's relative high price if I bought gold bars I would have to buy low weight ones. And I have noticed that the lower the weight of a bar the more expensive it becomes (when comparing it to the price per kilo). That's what's left me scratching my head...

In relation to silver coins, the prices seem to fluctuate quite a lot between shops. Some UK websites are more expensive than others. Some charge VAT and some dont.

The foreign websites are cheaper than UK ones however their high shipping prices mean that buying from them is only worth if you buy a high amount... It's mind boggling. :rolleyes: :)
 
iliria said:
I have just started in this area and was wondering if there are any sources of information that could start me off understanding the world of investing in silver (or gold). I am not aiming for short term investment so i dont expect to make a profit within a year or two. However i dont want to have to wait 10-15 years before making a profit either. :)
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Think of gold and silver as just another form of foreign currency money, it's like cash that's more volatile than regular cash. Not only the actual gold/silverspot price, but also with the AUD if you buy in local currency as most do.
PM's aren't really a good "investment", and basically nobody "gets rich" from "investing" in metals. Metals are not "gong to the moon". You won't make 10 times your investment for example.
Sure, you might double your money in a few years if you are really lucky, but whoopdy-do, hundreds of shares double in a week.

With this in mind, am I best buying coins or bars? I'm aware that coins carry a premium because of having been designed, minted and so on however you dont pay tax for them. Hence why I ask the question. If in the future I decide to sell is there a specific way of doing this? Or do I have to sell through places like ebay?
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Selling physical is not easy if you want a good price. Dealers pay you crap prices, ebay has big fees, face-to-face cash on the street with a trench coat will get you the best price for physical. Many on this forum buy and sell to each other.
Consider using a service like Perth Mint offers if you want ease of selling.
https://www.perthmint.com/storage/
You can buy you metal and they store it for you and you can sell it back at any time for very little margin. Physical (called "allocated"), or not-so-physical called "non-allocated".

Is investing in silver the same or more profitable than putting the money in saving accounts?
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If you bought in the last year or so then you'd be quite happy at the gains. If you bought more than 2 years ago you'd be crying at the big drop.

Any advice to get me started would be much appreiated.
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Many people make the mistake of thinking PM's are good "investment" and then realise that really it's just a highly volatile game that can have long periods of lows. Thankfully right now it's a fairly low-ish point.
 
Yes generally speaking the smaller the coin or bar the higher the % premium over spot. That's why it pays to stick to larger bars when buying silver in particular. You can pay a huge premium when you buy smaller coins and bars which you may or may not get back later when you sell. With gold it's not so much of an issue. Silver more so.

Not to sure about premiums when it comes to other coin series. Perth Mint Lunars and Kooks along with Chinese Pandas seem to perform the best. These are high quality coin series with lower mintages (Panda mintages aren't that small but they are still in huge demand) that don't tend to develop milk spots.

You'll have to shop around to find the best deals, as we all do :)
 
Good god. Quite a lot of hassle in this hobby as well then. It looks like I might be best sticking to Kooks, Pandas and Queen's Beasts then. Is there a lot of interest in the 10oz coins or am I best sticking with the 1oz ones?
 
iliria said:
Good god. Quite a lot of hassle in this hobby as well then.
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That is because you are thinking of it as a hobby (e.g. buying Queen's Beasts because you like the theme rather than considering the premium) while simultaneously expecting the outcome of an informed speculative investment. As soon as you start thinking of potential future return on higher premium bullion coins then you have to expect considerable hassle in tracking buyer preferences, mintages, quality, alternatives, your exit strategy, trends in fakes from China, secure storage costs, transaction costs, risks such as a fall in the spot price at the time you need to sell, your ability to ride out any unexpected and prolonged falls in the spot price, etc.

If you want a simple investment with the minimum of hassle that maximizes return in the event of a rise in the spot price then look for the lowest premium kilo bars you can find (and maybe even consider pool-allocated options rather than physical). If you want some protection (not guaranteed of course) against a stagnant spot price, then maybe rolls of popular, limited mintage 1oz collectable bullion coin like Kooks and Lunars or whatever is popular amongst buyers in your region, but only purchased in the year of release when premiums are the lowest.

Anything other than that is going to increase the hassle. And nothing is guaranteed.
 
Pete, quite honestly this story started with my intention to collect the silver Queen's Beasts simply because I like the theme. My intention was to frame and display them once I collected all 10. Then as I usually tend to do I started researching the gold/silver coin world and came accross various articles and forums. Having seen some of the designs I thought I could perhaps turn this into a hobby and collect some designs. I intend to buy a couple of silver coins per month (and a couple of 1/4oz gold coins per year). However having collected (and still do) all sorts of items through the years I am aware of the high risk of falling for the hype created by other collectors and retailers. Therefore I intend to buy only a few designs which, if I decided to sell in the future (5-10 years time), would have hopefully accured some value. Whilst I am not aiming for huge returns, at the same time I don't want to make a loss (i.e. get less back than if I had put the money spent in a savings account at 3%).

I have never seen price fluctuations as big as with silver coins. It doesnt help that some retailers display prices with VAT and some dont, some charge VAT and some dont. The foreign retailers are often cheaper but their shipping prices ruin that unless you buy over 10 coins at a time. It seems to be such an unregulated market and because of that I decide to buy only a couple of coins per month.

On another note I got a Star Wars Yoda silver coin from the NZ Mint and because of its novelty aspect I didnt mind paying the $20 shipping. What I didnt realise was the fact that I have to pay custom's charges. (Insert gun to the head smily here)

Not whining, just mentioning something that you guys have probably found out the hard way before me too. :)
 
I am with SilverPete on this one. Pool allocated Storage with a big bullion company...I use ABC Bullion....means no silver at home. The difference between buy back and spot is less than Ebay and Paypal fees.
 
tolly_67 said:
I am with SilverPete on this one. Pool allocated Storage with a big bullion company...I use ABC Bullion....means no silver at home. The difference between buy back and spot is less than Ebay and Paypal fees.
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Sounds a good idea but at this stage I do not intend to go into this heavily. I'm simply going to keep it as a hobby for the time being. Way to much uncertainty and headache for me I'm afraid. :)
 
I would say there's no single one strategy for everyone in stacking silver or other precious metals. Strategy may change depending on your limits and goals. You should investigate which dealers have the best prices for you and consider what purpose you have (why you need silver, what for) and after that try to stack different products like bars and coins, which you feel best for you at the moment. You can make some mistakes but that will be the best way to gain your own expereince.
 
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