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Best form of silver/gold/platinum to stack away for max returns/ease of sale - 20 year time horizon
jclovescoins
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Best form of silver/gold/platinum to stack away for max returns/ease of sale - 20 year time horizon ?
Opinions?
If I were to put $50,000 per year toward the stacking for the next 20 years, what do you think would be best?
(I) silver, gold, platinum?
(II) what form of the said metal?
(III) where to buy it from?
Thanks. I am leaning towards 1 oz generic silver rounds from BGASC at 0.39 over spot per round. Any thoughts?
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Comments
If I were to do that, it would be ASE's and AGE's....No rounds and no platinum. The U.S. gold and silver are readily liquid and a known value. Cheers, RickO
Where would you buy the ASE's from and what kind of premium?
pre 1921 morgan dollars bought as close to spot as possible
I personally would stick with silver, much more upside down the road. No generic stuff. Mint produced coins, preferably US Mint silver eagles. I also like Royal Canadian Mint .9999 10 oz. bars. I buy quantity from dbscoins.com
If you go with gold, stick with PCGS or NGC certified US gold coins. You're wanting the certification of not being counterfeit, so don't spend the extra for high grades - buy the certification without paying a premium for a higher grade.
Keep an open mind, or get financially repressed -Zoltan Pozsar
(1) Initially, I based my ratio on Portfolio Theory which basically means that I picked a ratio of 25%/50%/25% as my target and with a plan to rebalance the portfolio as I went along, to maintain that ratio. The rational for the ratio was that gold is a monetary metal and silver & platinum are more industrial metals (although silver still has a monetary component). It has proven to be true that the monetary component and the industrial component tend to buffer each other most of the time, while still maintaining the original dollar hedge idea.
Just a brief note that over the years, adding more silver became more cumbersome in terms of storage and transport and platinum does in fact have a less liquid market, so my ratio has eventually evolved into a 15%/70%/15% split. As the market moves, I still note in my spreadsheet that there is still a substantial buffering effect with 70% gold and 30% white metals.
(2) I'll get pushback on this, but I don't worry quite so much about splitting hairs on the absolute best lowball price as I do about getting into an easily-traded form of metal. This doesn't mean that bars or generic rounds aren't good investments, it just means that I don't know the bar or generic round markets and that I do trust the liquidity factor of ASEs, AGEs, Platinum Eagles, Silver Maples, Gold Maples, Platinum Maples, and Gold Sovereigns. These are what I buy when I'm buying bulk. Oh, and I did buy some 5 oz Silver ATBs, but bronco questioned the wisdom of doing that because of the higher buy-sell spread and I will no doubt take a little hit on those when I do sell them. (They featured a spot where I grew up, so I bought them anyway.)
To expound on the "form" question, one of the considerations in the forms that I mention is that when you buy a roll, or a monster box, you have a much easier time on the accounting end. Buy in chunks if possible, unless you are fooling around with something that you simply like to collect. Cost basis accounting for larger chunks does add to peace of mind over time. You aren't struggling to find that receipt from 20 years ago for the 4 Silver Eagles you bought off ebay so that you can report the $16.00 profit that you just made from the sale.
(3) BGASC would be fine, as I understand that they've been vetted by several members here. Always pay attention to any reports of slow deliveries no matter who you are buying from. I'd say that over the long run it's MORE important to buy from an established and known source who is doing enough business to be in the public eye. That way, any reports of something fishy will surface quicker so that you can always be alert to potential solvency issues.
There are other sources to be sure, but for bulk purchases I can recommend Apmex, Silvertowne, Scotsman Auctions, MCM and Mid America Coins. For collectible bullion I would mention Stuppler & Co., Apmex, baypreciousmetals (ebay only) and MCM (on occasion). Derryb likes DBS Coins as well, but I've never dealt with them myself.
I would always check at least 2 sources and make sure that their quotes are within 1% of each other before pulling the trigger. Markets change all the time, so there's never a single dealer that is always best, and the price you are quoted may very well depend on who has what available at the time, in addition to their own assessment of the market direction when you call. The goal is simply to make sure it's a competitive price under current market conditions - that's true for both buying and selling (when the time comes).
Every now & then, I decide to buy some bulk 90% silver. As bronco likes pre-1921 morgans, there is nothing wrong with 90% silver as an offshoot in the silver portion of a portfolio for variety. I tend to favor halves, but there is no reason not to include silver dollars, quarters and dimes depending on your preferences. I've searched through my bulk halves and assembled complete collections of Franklins just from a generic bag. It's almost like being back in 1964!
Sorry for the long-winded response, but you asked...
I knew it would happen.
Even buying from good sources doesn't always insure not getting counterfeit. Start with a good digital metal verification machine and check every piece or coin regardless of where you get it. Personally I like silver as the disparity is very wide between gold and silver and is due for a correction. I don't think gold will drop enough to bring them back in line so I think silver is due for a big jump. I like liquidity so 1 oz silver rounds is my preference. I like Canadian's or ASE's as they tend to hold a premium. Generics are a big risk but demands lower prices than the Mint coins but have susceptibility to counterfeiting. The same concept for Gold coins. Smaller denominations have higher premiums but offer greater liquidity. The disparity btwn Gold and silver is 81 times and should be around 40 times. I would hedge my bets by doing and 8 to 1 ratio. 8 x 1oz silver to 1 x 1/10 oz gold or 80 silvers to 1x 1 oz gold. With the volumes you are talking I would try going direct to one of the Minters.
Bob Sr CEO Fieldtechs
I would go with ASE and AGE for liquidity.
Are you sure that was me , I think its more likely I would have whined about the lack of liquidity on the pucks
20 yr Cds are paying over 4%
Knowledge is the enemy of fear
will the issuer still be there in 20 yrs.? The only thing I see worse than a paper promise for metals is a paper promise for dollars.
Am I locked in at 4% for 20 yrs. while rates rise?
Keep an open mind, or get financially repressed -Zoltan Pozsar
@bronco2078 said: Are you sure that was me , I think its more likely I would have whined about the lack of liquidity on the pucks
Well, I believe the point was that due to lack of liquidity on the pucks, I would only be selling them @ melt, or so...but in true jmski fashion, I was thinking that down the road there will be a huge groundswell of interest in the Effigy Mounds pucks and that I'd be sitting on a monster box of "impossible to find at any price" rarities, so that I could sell out and go live in Galt's Gulch. Or, I could continue to live in relative obscurity like I do now.
I knew it would happen.
@derryb said: will the issuer still be there in 20 yrs.? The only thing I see worse than a paper promise for metals is a paper promise for dollars.
Am I locked in at 4% for 20 yrs. while rates rise?
The issuer will probably still be there but that by no means is any guarantee that the bond would have been a good investment at any point along the way, because as you well know, you are locked in @ 4% and as rates rise, the value of the bond goes straight down.
I knew it would happen.
Liquidity is king!!!!!!!!!!
I know 2 retired dealers who are basically living off the sale of raw morgans at flea markets . The one guy brings 50 morgans to a flea market once a month and sells out in two hours or so at 20 to 25 bucks each. Call it $1000 invisible dollars extra a month over and above his social security . He is one of the few smart dealers I know , he is not supporting 3 ex wives like most of those fools .
The other guy does it a little different , he doesn't do flea markets just in person sales , but it works pretty much the same.
@bronco2078 said: I know 2 retired dealers who are basically living off the sale of raw morgans at flea markets . The one guy brings 50 morgans to a flea market once a month and sells out in two hours or so at 20 to 25 bucks each. Call it $1000 invisible dollars extra a month over and above his social security .
That works! Smart idea!
I knew it would happen.
20 years from now it would be nice to have 5 or 10 thousand raw morgans tucked away. Buy the dips in the here and now and fill a few sacks
It seems the consensus is ASE over generic silver. I ma having a hard time justifying the 2.50+ premium though. It looks like buy prices are 1.00 over spot but the online retainers are at 2.50+ for premium. Would have to gain 10% just to break even. Though I do think at some point during the 20 year time horizon, silver will hit $50.
AGE ASE !!!
With that kind of investment, I would do 2 things.
1st.
Buy another rental property, rent out the property and invest the gain in the cheapest silver I could find at the time.
2nd option.
Put the word out that someone is looking to buy silver/gold <10% of spot (Better prices then the We Buy Gold places or Pawn Shops) and stack what comes around.
If you get items that you can flip quick at 2x spot, turn them into more product.
I see some have much to learn about CDs.
Knowledge is the enemy of fear
@cohodk said: I see some have much to learn about CDs.
Correct me if I'm wrong, but any time that you surrender a CD before it's maturity, you lose a chunk of that earned interest.
Also, correct me if I'm wrong, but changes in interest rates definitely do affect the value of the CD. True or False?
I knew it would happen.
@rte592 said: Buy another rental property, rent out the property and invest the gain in the cheapest silver I could find at the time.
Why not just buy the silver and save yourself the time & trouble of managing the rental property? It simply depends on what you want to do with your time & energy. Besides, real estate rentals aren't a guarantee any more than a fluctuating precious metals market is a guarantee.
I knew it would happen.
Make the tenants pay you in silver , in exchange for a small discount.
@ jclovescoins said: It looks like buy prices are 1.00 over spot but the online retainers are at 2.50+ for premium. Would have to gain 10% just to break even.
Yes, that does seem to be the case. True enough.
Though I do think at some point during the 20 year time horizon, silver will hit $50.
Yes, when and if it does break $50, you will feel like a genius. The question is, what then?
I knew it would happen.
There are already more ASE's than morgan dollars and probably peace dollars combined . They are bland and boring and you can sell a silver dollar for more even in spite of the lower silver content.
I've owned a bag of silver dollars twice in my life although it was in the late 1970's. The thing is that some of the coins were quite worn, and the other thing is that after handling each of the coins in a $1,000 bag, your hands are mighty dirty. Silver Eagles on the other hand - are so shiny and bright!!!
I knew it would happen.
buying quality enables one to later sell quality. There is good reason for a higher premium. Your buyer will return the premium to you.
Keep an open mind, or get financially repressed -Zoltan Pozsar
stop it , you know that will only happen if you sell to a private party , and it will be a dollar premium not a percentage premium. Also if silver goes to 50 the eagles will trade below spot
Bronco2078----When silver hits $50, where will I be able to buy this silver below spot?
Worry is the interest you pay on a debt you may not owe.
don't you remember when it hit 46 or 48 or whatever it was in 2011? silver eagles were not trading at a 2 or 3 $ premium , 90% was below spot scrap was quite a bit below spot
@bronco2078 said: The one guy brings 50 morgans to a flea market once a month and sells out in two hours or so at 20 to 25 bucks each.
Apmex is selling VG-XF for $25.50/ea. right now; Good and better @ $22.00/ea. right now. I was considering this option, but it seems that generic circulated Morgans have more variables that will affect the pricing than Silver Eagles do, especially when selling. I suppose that's no biggie - it's all about knowing your market.
I'm sure that ASEs would generate interest at a flea market, as much as silver dollars do. As time goes by, ASEs become the predominant silver bullion trade. Besides, it says "ONE DOLLAR" right on them and they contain exactly one oz., which makes the pricing easier for anyone who can't handle the .7734 oz. conversion.
I knew it would happen.
I'm not saying buy a sack of morgans. I graze on them , I'm like a goat in a patch of poison ivy , when I stop buy a shop to buy something I always leave with a few morgans also. Everyone has a bowl , if it says $20 each I buy the 5 best ones in the bowl and move along. Over time just doing that I have amassed hundreds without really noticing.
That's not the entire story. There is much more to know. And what you do know must be put in context and held in relation to other assets.
You may want to research the terms "step-up" and "survivor option".
Knowledge is the enemy of fear
I do know that like an annuity, you never want to lock in at low interest rates.
Keep an open mind, or get financially repressed -Zoltan Pozsar
"Low rates" is a relative term, no? Annuities are not CDs. Smart money did indeed lock in low rates over the last 10 years.
Do you know the return on an ounce of gold from 1978 to 2018 (double the OPs time horizon).?
Knowledge is the enemy of fear
I do know that between 1978 and 2018 holders of gold had multiple opportunity to cash in at great profit and equally multiple opportunity to buy back in at low prices. Those that locked in on a long term CD (or an annuity) did not have the same opportunity.
Annuities are similar to CDs in that the buyer is locked to a set interest rate and cannot change his decision when rates rise. Annuities are investment products, typically via a conversion of set aside retirement funds. For example federal retirees are given the option of converting their Thrift Savings Plan balance (a form of 401k) to an annuity. Once they purchase the annuity they are locked in at the current rate for the life of the annuity. Purchasing any long term investment that pays returns based on current interest rates is a poor decision when rates are historically low.
In the case of a CD, the holder has to wait for maturity to reinvest at a higher rate. This is why your earlier suggestion of a 20 yr. CD at currently low rates is a horrible suggestion. Money that invested in shorter term CDs over the last 10 years did turn out to be smart, but only because interest rates have continued to fall, and only if not compared to the many better opportunities that were available. Question now for the CD buyers is "what are the odds that rates will not rise?"
All investments should consider at least these two factors:
(1) Liquidity - "How easily and how soon can I get out of the investment?" CDs lock you in for a set period of time.
(2) Future value - "What are the odds value (or price) will increase?" Better known as picking a winner.
All terms are relative to something. "Interest rates" are relative to their historical values. Current rates are in fact low:
Keep an open mind, or get financially repressed -Zoltan Pozsar
The demand for silver eagles at $50 (and rising) will result in higher premiums. Premiums paid by retailers will rise along with premiums paid by private buyers. ASEs will possibly trade below spot at $50 but only in a decline from $60.
Keep an open mind, or get financially repressed -Zoltan Pozsar
It depends on the mood . Is it a steady leveling up to 50 or a moonshot. Last time around it was not easy to move silver at spot near the peak. I remember that large bars were at a discount , 90% and other junk was at a discount ASE's were auctioning around spot on ebay (which is below spot in your wallet). Yes APMEX might have been asking for 3$ over but was anyone paying that? Who knows . I remember stopping all buying around 38 because I thought it was going to go down from there. There was dumb money buying up any form of silver they could find all the way up but I was on the sidelines for a while before the crash. I remember unloading a lot of odds and ends around 40 and getting back of spot. When the big drop happened premiums evaporated spreads went way wide on everything.
Wide spreads meaning the bid dropped , the ask didn't go up
If the mood is "ASEs below spot" what do you think the mood will be for generic/junk silver? like Coho says, "everything is relevant."
Keep an open mind, or get financially repressed -Zoltan Pozsar
5, 10,20 classics as well as well as coin silver. Had bullion in a he 80s lots of luck. Have insurance on your insurance..... tax laws will change just remember try staying in the 28% tax bracket. Lots of luck
_ Annuities are investment products_
No. Annuities are insurance products. And more knowledge of them could help you understand the options available such as increasing income potential.
Money that invested in shorter term CDs over the last 10 years did turn out to be smart, but only because interest rates have continued to fall
Wrong again...The buyer of LONG TERM cds did better as they were able to lock in higher rates. The 1 or 2 yr CD buyer kept reinvesting at 1% or less, while the 10yr CD buyer got nearly 3-5%. In a rising interest rate environment it might be better to stay short term, but we really dont have a crystal ball on rates, do we? So perhaps a yield close to the 100 yr average yield on the 10yr Treasury may not be unattractive.
I'll ask you again to research the term "step up", as that may remove some of your misconceptions.
I would also encourage you to take a good look at the chart you posted. Look at the last 140 years, what percentage of time have long term rates been above 7%? And look at the length of the cycle..30-40 years. How old will you be in 30 years?
Knowledge is the enemy of fear
no....relative.
Knowledge is the enemy of fear
While sold by many insurance companies a purchase of an annuity is an investment of current funds in future payouts. If it walks like a duck . . . then it is an investment.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Nope...its still an insurance product. An annuity such as you describe (there are different types) is the transference of risk of outliving ones money to an insurance company.
Knowledge is the enemy of fear
A lot of people don't seem to understand premiums
When silver was 6 bucks an ounce the ASE premium was 3 bucks. That is half an ounce of silver you gave up to pay that premium. .5 ounces lost at 6$ spot translates to $9 lost at 18$ silver , $15 dollars lost at $30 silver , $25 dollars lost at $50 silver.
If the premium is a set dollar amount then the percentage changes wildly with spot movement. As prices rise premiums as a percentage disappear and stackers don't seem to notice.
No premium on an ASE is deserved by any seller beyond the US mint when it sells to the AP and the AP when it sells to the public. The first owner is the only one who has to pay that premium. The mint took raw silver and struck it into a coin which is work that costs money. When joe blow the 17th owner of a 2002 ASE sells it to me he is not striking it or doing any useful work whatsoever , he is probably just another dumbass that lost money in silver. Giving him back a premium would only reinforce his incorrect opinion of his investment skills.
Do not ever assume you will receive a premium for anything , a lump of silver has a melt value that is all.
Add up the number of silver eagles made over the last 32 years and try and convince me that they are scarce.
400 million were made through 2014 so lets call it 500 million now and that doesn't include proofs , reverse proofs , burnished , enhanced blah blah blah.
There is much more silver in the form of silver eagles than morgan dollars and all junk 90% silver combined. All brand new all uncirculated , all boring.
Nope, the purchase of an annuity is for income. This is what makes it an investment. While the seller uses actuary data to determine monthly payouts it is not a life insurance policy. A buyer is paying up front for an immediate steady stream of income while he is alive.
Keep an open mind, or get financially repressed -Zoltan Pozsar
I never said it was a life insurance policy. You are confusing yourself due to lack of full understanding.
Knowledge is the enemy of fear
Do you use eBay to purchase coins/bullion? If so, make sure you are registered to receive "ebay bucks" (see link below). Wait for a 10% ebay bucks promotion and purchase rolls of silver eagles from MCM (moderncoinmart), APMEX or another large bullion retailer whose listings are eligible for ebay bucks. This will help lower your cost on the eagles to close to spot + $1. Buy the rolls through paypal with a 2% cash back credit card to save even more money.
This is one of the listings I follow for rolls of ASE's that are eligible for ebay bucks promos:
https://www.ebay.com/itm/Roll-of-20-Coins-2018-American-Silver-Eagle-1-GEM-BU-Coin-SKU51559/132425406124?ssPageName=STRK:MEBIDX:IT&_trksid=p2060353.m1438.l2649
I also buy 20 Francs during ebay buck promos and buy them for under melt after the "ebay bucks" savings and 2% cash back credit card rewards are calculated in. I obviously pay my CC off at the end of each month.
https://www.ebay.com/itm/Swiss-Gold-20-Francs-Helvetia-Almost-Uncirculated-AU-Random-Year-SKU-19/111646672303?ssPageName=STRK:MEBIDX:IT&_trksid=p2060353.m1438.l2649
Here is an overview and explanation of the eBay bucks program:
https://pages.ebay.com/rewards/faq.html
Feel free to PM me if you have any questions!
For the OP....what do you plan to do after 20 years? Will the gold or silver be used to fund retirement? Do you plan to systematically liquidate your holdings?
Knowledge is the enemy of fear
10 oz silver bars, us gold coins in AU to avoid premium and would be closest to spot PCGS,NGC, OR ICG
I'll take this deal all day long vs bullion coins and they're graded
https://www.ebay.com/itm/Sale-Price-20-Gold-Double-Eagle-Saint-Gaudens-NGC-MS-64-Random-Year/162790246126?_trkparms=aid=111001&algo=REC.SEED&ao=1&asc=20160908131621&meid=d90bc2cedb0743ed94c4ebfb1a1d6a0d&pid=100678&rk=1&rkt=15&sd=162790246126&itm=162790246126&_trksid=p2481888.c100678.m3607&_trkparms=pageci:21427254-78b0-11e8-a5cc-74dbd1806576|parentrq:387997d61640aa13c14850e5fff98e66|iid:1