If you could start over...

slantycouch

Saw a similar thread on another board and thought it was good. I'm still young enough in my meager collection that I (and hopefully others) could benefit from the feedback of you more experienced buyers...

The question is, if you could start over in PMs, what changes would you make to your collection? What mistakes have you made? What specific items would you never have bought, and what ones would you concentrate more on?

gecko109

My advice to anyone starting out in metals is to start slow and consistant. DCA your way into the market. A consistant buying pattern done over a period of time = a nice stash of metal sooner than you think. It also lessens your risk to wild fluctuations in prices. I also recommend buying what you like, because just like in any other area of collecting, if you bought something you didnt like just cuz the "price was right" chances are you wont ever really like that piece. I have never regretted buying a single gram of my precious metal over the years, but I have plenty of regrets of not buying more when prices were lower...but hindsight is always 20/20.

dontippet

If I could start over, I would have started a few years ago, when silver was rising to $8 an ounce. A couple buddies were buying at that time, and I just couldn't bring myself to do it.

edmundfitzgerald

I'm just starting, and I've decided to collect gold eagles instead of credit suisse papp just because I like
the gold eagles better. So I agree that you should only invest/collect in what you like.

I've decided to buy two ounces of gold each year for however long I can. That will allow me to not try to catch the highs
and lows of the market, but just have a small steady collection over a long term.

Gold isn't that attractive to me. There's really no eye appeal in it at all. I'm just doing it because I've read
so much about how we should be diversified. So I'm going to have 10 percent of my extra money invested in gold.
I think that's a wise decision, but who knows.

jmski52

I'm happy with how I've built my pm position. I like to keep things manageable for tax purposes, so I buy only when I have enough money to be able to buy "a batch" however you define it. In other words, I buy in larger batches whenever possible in order to have the same cost basis for the chunks of that batch when liquidation time comes. I don't like trying to keep track of a bunch of receipts for various types of purchases - it's simply too messy and hard to keep track of the accounting. If you save up in order to buy in larger chunks, then you have fewer reciepts to track for tax purposes. Selling is not as much of a problem that way, and you can split up the sales into smaller batches without as much concern because once it's sold, that's the end of the accounting record.

I do think that it's important to have a regular savings or investment plan, and I do think that it's important to "average in" over time, even though I wait in order to accumulate cash and then do my buying in larger chunks when possible. For me, if that means I have to buy when the price is high or wait it out for lower prices while the cash continues to accumulate - that's a decision I make on the spot depending on my assessment of the market and my expectations for metals prices. Once my cash reaches a critical mass, then it's a matter of seeing how long I can stand it before I have to "buy something".

Also, if I think that an upcoming Mint issue has some interesting aspects to it, I might take a plunge in that direction instead of plain vanilla bullion, but I really have to like an issue alot if I decide to speculate in a Mint product, especially when the Mint premiums are running over 35% on the front end, especially for some of the good stuff. Much depends on whether I think a Mint product is cool or not in terms of how the general collecting and coin-buying public will look at it after it is no longer for sale.

I look at my precious metals holdings as a savings account, to be liquidated when I might need the money. Until that time, it keeps growing. I'm not married to the metals, but I think that there aren't any better alternatives now, or even for the forseeable future. Maybe if I were much smarter, I would be able to pick out some better alternatives. The point is to keep looking around and to try to identify a better idea when it comes along. When I see some important trends start to reverse, I will change my thinking. Based on today's environment, I'd say that it might be awhile before I am ready to consider something besides pms.

roadrunner

If I could start over I would put some effort into understanding the trading aspects of PM's before making a lot of heavy purchases. At a minimum this will help guide one's purchases to more in tune with bottoms than with the middle of up-trends or tops. While some may prefer to buy at a set time every month, etc., it makes more sense to me to understand gold's cycles and charts. It is not that hard to get a feel for when things are closer to the bottom than with tops. What I've learned in the last year or two would have been very useful when I was first buying into gold in 2002-2004. And as Sinclair frequently mentions, there is nothing wrong with selling up to 1/3 of your physical on great strength with the intentions of buying it back again during considerable weakness.

roadrunner

edmundfitzgerald

<< <i> While some may prefer to buy at a set time every month, etc., it makes more sense to me to understand gold's cycles and charts. It is not that hard to get a feel for when things are closer to the bottom than with tops. What I've learned in the last year or two would have been very useful when I was first buying into gold in 2002-2004. And as Sinclair frequently mentions, there is nothing wrong with selling up to 1/3 of your physical on great strength with the intentions of buying it back again during considerable weakness.

roadrunner >>




According to the charts, I believe gold only had a $200 dollar drop in the last ten years ? Was it from 1,000 to 800 ?
Other then that it has been up, up and away. If you bought at 1,000, 900, and 800, then you are still ahead of the game.
If you tried to wait for 700 or 600 on that drop, then you missed. I still think it's good to buy periodically, and not try to
pick spots. But to each their own.

percyb

When I buy raw, I buy silver dollars as close to the price of an ounce of silver as possible.

RedTiger

I got started in coin collecting in 1972 because silver prices were rising. I don't have too many regrets, because I realize that no one knows the future. Sure if one had a map of prices over the past decades, they could have all the money in the world, but no one had the map, and no one has that map going forward, no matter how many newsletters they have sold.

One thing that does come to mind, is that I would spend less time listening to "Chicken Little." The Chicken has been with us all these many decades, always screaming as loud as it can about some imminent crisis that was about to destroy the U. S. economy. While there certainly have been problems and setbacks, for the most part, the economy muddles through, goes up and down in cycles. Perhaps one day the "Chicken" will be right and the sky will actually fall, and those in their bunker or in their ark will have the last laugh. In my case, I think I wasted so many decades of my youth, preparing for the end of time, imbibing the dark potions peddled by the "Chicken." I regret that time I spent under the spell of the "Chicken," because it cost me. It cost me financially, but by far the worst part, has been the wear and tear on my spirit, so much so that it lessened my joy of life.

So my message to a young person is: be optimistic. The future might be amazingly good. Sure there are always problems and hurdles, but with big problems often come big opportunities. Be ready, don't fall under the spell of the chicken, listen to the blue bird of happiness. Chase your big dreams, not the dark thoughts that I spent far too much of my youth pondering.

secondrepublic

RedTiger makes some very valid points, as does Roadrunner.

In retrospect I would have bought more of the yellow stuff years ago and more palladium a year and half ago.

PerryHall

<< <i>RedTiger makes some very valid points, as does Roadrunner.

In retrospect I would have bought more of the yellow stuff years ago and more palladium a year and half ago. >>



Yup. Hind sight is always twenty-twenty. You would also know which stocks to buy and what lottery numbers to play.

KUCH

RR makes a good point when he mentions Sinclair saying you should sell 1/3 of your investment when profit time is right and then reinvest when opprtunity presents itself. I've read in the past Sinclair thought that sell price was $1650 for 1 oz of gold. Do you think that is still a valid sell price or has it moved up or down?

When I got back into coin collecting 7 years ago, I always liked gold but really never purchased gold coins or PM's. Instead I purchased 1 or 2 key date coins a year. Wish I would have followed my passion. As what has been said, always follow your passion in collecting.

jmski52

Hind sight is always twenty-twenty. You would also know which stocks to buy and what lottery numbers to play.

You must feel the force, young Skywalker.

roadrunner

I like what Red Tiger said. As a member of his generation I think I too fell prey to the "chicken" in the early 1970's. Though I never became a true gold and silver hoarder, what was reinforced heavily to me was that stocks stunk (ie 1966-1982) and that hard assets where the place to be in the long run. While coins did have their time from 1975-1980 and then 1983-1990, they were vastly outpowered by stocks and bonds during the 1982-2000 period. My dislike for stocks learned way back in the 1970's has been hard to overcome. The only time I bought any quantity of metal was in 1982 after silver pulled back to a "cheap" $13/oz. I jumped right in there just as the coin market was bottoming as well. Unfortunately that wasn't it for silver and I saw it continue to fall. A year or so later I bailed out and sold it at $9....not to return again until 2003.

According to the charts, I believe gold only had a $200 dollar drop in the last ten years ? Was it from 1,000 to 800 ?
Other then that it has been up, up and away. If you bought at 1,000, 900, and 800, then you are still ahead of the game.
If you tried to wait for 700 or 600 on that drop, then you missed. I still think it's good to buy periodically, and not try to
pick spots. But to each their own.

I don't think Sinclair is suggesting that holding gold straight through to $1650 is necessarily the best course for everyone. Before gold hit $1200 he did feel that the market afforded dozens if not hundreds of opportuities to sell a portion and then buy it back. Those swings don't have to be $200 either. They can be as little as $50. There have been numerous entry points where gold has sold off 8-10% or more over the past 8 years. And the easiest way to do this is with PM equities/securities/ETF's/funds, etc. One can do it with physical bullion as well though your % commissions will run much higher. Gold and silver stocks have pulled back 15-30% numerous times in the past several years.

I would imagine that few people got to buy gold at $700-$800 during the 2008 crash because they were already pretty much "all-in" as they bought during the run-up to $1033. One cannot buy on pull backs if they never sell anything on strength. But buying and holding is certainly a strategy that will work for the majority. In fact since gold hit $1200 Sinclair shifted gears and suggested all but the most experienced traders should be standing pat. The potential of being kicked off the gold bull will only get higher as volatility increases. It will be hard to get back on once shook off.

roadrunner

derryb

Always keep re-sale in mind when you buy. Don't be buying off the wall coins just because they are gold and they are cheaper. They are cheaper because fewer buyers want them.

Try to get to the point where you can buy in volume and get a better per ounce price. You will find many bullion wholesalers recommended with a forum search.

Realize that at some point when gold reaches a higher price, there will be many counterfeiters and many gold scams. You can protect yourself now by investing in gold coins that have been certified by a reputable grading company. It is not hard to find gold eagles in MS69 for about the same money as raw. You won't be buying the grade, you will be buying the certification and that will become very important at some point in the future.

Unfortunately you don't have the opportunity many of us had when the mint was spitting out gold collector coins and people were paying a high markup for them graded. Quite a few of us were able to bankroll our PM investments by grading and flipping modern gold. 2008 was an especially good year for US Mint gold coins. I only mention this in the rare event that the mint makes this moneymaker available again.

Familiarize yourself with the Kitco website. It is an excellent source for spot prices and charts. Read all the commentary you can on gold investing, both pro and con. Don't juse become a gold collector, become a gold expert. PM me an email address and I'll get you started with some good commentary websites.

Keep your mind open on other type bullion investments, especailly if you have a self-managed IRA. Mining stocks and select ETFs should see the same, if not better, future results as PMs.

And most importantly, don't panic when prices drop. If you are convinced the long term picture for gold is "way up," learn to view price drops as buying opportunites. I personally do not want to see gold hit $5,000 by the end of the year. I want it to keep creeping its way up with minor pullbacks. These pullbacks (along with some great flipping opportunites with mint products) are what have allowed me to go from zero ounces to 150 ounces in just under four years.

OnlyGoldIsMoney

A few regrets:

- I did not start stacking PM's in 2004. I had the money in the bank to do that but did not. Still I am glad I started buying aggessively in March 2009.

- I focused too much on numismatic gold. The quarter eagles I favor contain $140 in gold today but most coins suitable for a registry set start at $300 and go much higher. Despite that I am still glad my coin collection contains gold and not high grade modern copper, nickel or silver coins.

- I did not dip into savings to buy PMs after I did start buying. I have only been buying using current income. Money that would have formally gone into stagnant bank CDs now fuels my metal buying.

I learned a great deal from this Precious Metals forum before buying metals. Someone suggested that post 1984 US gold commemoratives commonly sold for little or no premium over melt. Now I have dozens in my stash. I also stumbled across US Arts Medallions (1980-1984) on this forum. The last one ounce Grant Wood I won on ebay was $30 less than the then prevailing spot price and that was before the 2% off with Ebay Bucks and 3% off with Mr. Rebates.

Darin

I would buy only UNC Silver Eagles or 90% silver in AU condition. As for gold, 1 oz. Gold Eagles or Buffaloes. Just for the uniformity at selling time.
I've bought many different forms of silver over the years, now I'm going to sell my oddball stuff to Apmex this week. Silver Brits, Pandas, 1/2 oz canadian timberwolves, 1/2 oz year of the dragon, monkey, horse, etc. Vials of silver nuggets, a troy lb. coin.
Why did I buy all that stuff?