A bullion buying strategy when gold & silver are already "high" - wise, or folly?
jmski52
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As a follow-on to Renski's "what would make you stop stacking" thread, I decided to throw my current strategy up for a critique.
I would stop stacking if I suddenly lost my mind, or probably if "real interest rates" went very far into positive territory. Aside from those two considerations, I will keep buying because I think I'll be on the right side of the trade.
We're familiar with the fact that most numismatic material loses premium as the bullion prices rise, and conversely - the numismatic material gains premium as the bullion prices fall, right?
I've been known to buy straight bullion, but I've also benefited greatly by buying into the low mintage Modern Bullion at times as well. These days, I find myself buying the low mintage offerings more, and generic bullion - not so much.
I'm buying in spite of the high premiums, which is a strategy that worked great in the past for me. Do you think it's wiser right now - to be buying generic bullion at low premiums or Mint bullion at higher premiums?
I would stop stacking if I suddenly lost my mind, or probably if "real interest rates" went very far into positive territory. Aside from those two considerations, I will keep buying because I think I'll be on the right side of the trade.
We're familiar with the fact that most numismatic material loses premium as the bullion prices rise, and conversely - the numismatic material gains premium as the bullion prices fall, right?
I've been known to buy straight bullion, but I've also benefited greatly by buying into the low mintage Modern Bullion at times as well. These days, I find myself buying the low mintage offerings more, and generic bullion - not so much.
I'm buying in spite of the high premiums, which is a strategy that worked great in the past for me. Do you think it's wiser right now - to be buying generic bullion at low premiums or Mint bullion at higher premiums?
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Comments
Depends on if the PM trend continues. $800 gold and $20 silver were "high" at the time.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
are probably going to do to bullion. Europe is already starting to apply gold buying limits to buyers. It's only the first step. Might start to make more people look at miners as a more
attractive, dividend paying alternative. It's no more paper gold than GLD is.
roadrunner
I see my little stack more a collection than an investment. I don't stop buying if Ag and Au are high, though I am forced to reduce my purchases because my salary stays the same (even though I just got a promotion and a raise!
I don't have enough knowledge to buy numismatic coins (I am however trying to add one here and there) and I usually buy modern bullion instead of putting my money in a savings account.
Though, lately I am trying to add coins and bars with limited mintage or higher demand (1/15 Maple, fractionals bars...), they shoud keep their demand high even with a drop in PM.