Beginner to precious metals
chipotlecowboy
Posts: 17
Hello,
I'm looking to one day get into the precious metal market , but right now I'm just trying to learn everything about it that I can . Kelly one direct me to some online resources beginners understand some of the concepts of the hobby/market. For example, I know pure silver is .999, but I've also heard buying anything with 40% silver content or more is good if the price is right. Yet I don't know what things might contain silver, or how to tell the content of such (coins the exception - I understand that hobby a bit). Just looking for beginners " idiots guide" I guess. Background is in militaria and vintage sports cards
I'm looking to one day get into the precious metal market , but right now I'm just trying to learn everything about it that I can . Kelly one direct me to some online resources beginners understand some of the concepts of the hobby/market. For example, I know pure silver is .999, but I've also heard buying anything with 40% silver content or more is good if the price is right. Yet I don't know what things might contain silver, or how to tell the content of such (coins the exception - I understand that hobby a bit). Just looking for beginners " idiots guide" I guess. Background is in militaria and vintage sports cards
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I have cycled through all of the approaches over the years and I now believe that a stack built of SAE and GAE will never be the wrong approach.
Loves me some shiny!
My stack consists of:
Anything 1 oz. = rounds. ASEs, Canadian Maples, generic rounds from reputable companies.
Anything over 1 oz. = bars. Generic bars bought at near spot from reputable companies.
MY GOLD TYPE SET https://pcgs.com/setregistry/type-sets/complete-type-sets/gold-type-set-12-piece-circulation-strikes-1839-1933/publishedset/321940
You may hear lots of approaches and opinions on what to stack. After 20 years I can say that a fool proof way to build your new bullion stack is to focus on Silver or Gold American Eagles.
I have cycled through all of the approaches over the years and I now believe that a stack built of SAE and GAE will never be the wrong approach.
Great advice. This is a great way to get your feet wet.
If you can make it to a coin show, you can learn a lot just from talking with the dealers who have precious metals in their cases.
I would urge you to only buy items that are clearly marked as to the precious metals content or government issued coinage. My son bought what he thought was a silver buffalo round only to find out it wasn't silver. Small price to pay but very discouraging for him.
You may hear lots of approaches and opinions on what to stack. After 20 years I can say that a fool proof way to build your new bullion stack is to focus on Silver or Gold American Eagles.
I have cycled through all of the approaches over the years and I now believe that a stack built of SAE and GAE will never be the wrong approach.
This. And add gold buffalo coins.
. . . and read, read, read
"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
There are many other ways to buy precious metals, and they all have slightly different considerations in terms of liquidity, cost of acquisition and purity or assay. In the final analysis however, everything boils down to the number of ounces of pure metal and whether or not you think the premium is worth it.
In most cases, whatever you can obtain at the very lowest price per ounce - will likely have to be sold at the very lowest price per ounce when you sell. In addition to changes in the price of the silver - the premium, or markup over the spot price of the metal, will also vary as the market changes - this is true for both high premium bullion and low premium bullion.
There's a higher premium placed on Lexus than on Ford, even tho' both vehicles will get you around. Sometimes, the premium simply reflects the fact that the coin is widely recognized for purity and quality assurance, as with the American Silver Eagles. Sometimes a privately made piece will command a premium because of a cool design, but the potential downside is that premiums for popular private bullion items tend to fade away over time - leaving you with only the melt value of the metal when you sell.
Most circulating US coins were traditionally made of 90% silver composition. From 1965 to 1970 however, the composition of half dollars was changed to 40% silver. Older Canadian coins were made of 80% silver. In any case, the bullion value is calculated as a net number of ounces of 100% silver, so the gross weight of the coin times its purity is a necessary calculation to figure the net bullion weight.
Other countries produce 1 oz silver bullion coins as well, and usually there is a higher premium for foreign 1 oz silver than for ASEs. Several private mints produce silver bars, and there are various considerations about quality, market recognition, liquidity and collectability for many of these bars, both old and new. If starting out with silver bars, stick to the most recognizable brands such as Englehard, Scottsdale, Sunshine, Johnson Matthey, Credit Suisse, Pamp Suisse and a few others.
That said, I agree with carew.
I knew it would happen.
Awesome guys.. Thanks for all the great advice. I spent a few hours last night learning about junk silver and how to calculate the value of pre-1965 coins. Where is the best place to get a few SAEs? Are there any precious metals sellers more widely trusted than others?
There really is no "best" place to get SAEs. Watch the BST ads here and on the BST board. Or place your own ad like WTB a roll of SAEs for $XXX per roll delivered. Coin shows can be a good place, esp. if you don't want your transactions to leave tracks. There you can buy with CASH and/or sell for CASH. As for premiums, SAEs come with a $2 premium right out of the gate. The mint sells them for $2 over spot to a group of 11 or 12 wholesalers called Authorized Purchasers or APs. The APs in turn sell to dealers and/or big bullion houses like JMBullion, Provident Metals, etc. The SAE premium tends to persist in the marketplace, although once the coins enter the "marketplace" there is no requirement that anyone guarantee that you will recover your premium. One dealer may offer you $1.60 over spot for your SAEs while another may offer below spot. OTOH, the dealer offering $1.60 would maybe offer $.50 under for bars or rounds. Or you could try and sell to the same folks those dealers are trying to sell to and maybe get $3 over.
Manfra, Tordella & Brooks is a possibility, as is Dallas Gold & Silver although I haven't bought from either of them in awhile.
Minnesota placed a punitive tax on bullion sales so be careful if you buy from a Minnesota dealer. The status of that law has been changing, so I don't know if it still applies.
Scotsman's website has a nice buy/sell spreadsheet that they keep current for all of the most common bullion coins, and in different quantitites. (Just like most things, you do get a better deal buying bullion in bulk, rather than one coin at a time).
All the stuff that Bajjerfan just mentioned is good background info as you become more involved.
I knew it would happen.
90% refers to silver coins made for commerce before 1964 ( The numismatist's cherrypicking arena)
80% is typically "dark side" or foreign coins.
.999 is pure bullion.
Some bars, bells, whistles and bullets are worth more. (poured bars carry a premium , sometimes)
A TROY POUND is different than a dry pound.
16 ounces is a pound (for bakers)
12 ounces is a pound (for precious metal people)
There are 28 grams in in an ounce if flour
And 31.1 grams in an ounce of silver.
This can be confusing. Metal is heavy. That's why precious metal is also toxic.
My YouTube Channel
I'd say;
Don't buy until you understand what you are buying.
There will ALWAYS be another deal.
Even more so understand your goals.
Your collection could increase in value or decrease in value. And usually does both.
Staying close to this forum will yield lifetimes worth of information and experience.
Buying a few American Silver Eagles from a place like Apmex is a good start.
I'd also add:
• Buy from a trusted source
• Document whatever you can
• Keep organized and in a safe, dry place
Menomonee Falls Wisconsin USA
http://www.pcgs.com/SetRegistr...dset.aspx?s=68269&ac=1">Musky 1861 Mint Set
Buy weekly for the rest of your life
Lol!! That's what I'm trying to avoid!! I'll have too much impulse buying if I'm not careful
Kinda.
Here's my "take" as a bullion dealer (coins too) since 1979 Hunt silver madness.
Use HISTORY for your decisions.
I advocate BOTH silver and gold but GOLD primarily and here's why.
I have EXPERIENCED too many silver collapses. As a "thinner" (less liquidity) market it is easier to manipulate.
My PERSONAL bias against silver is what MANY consider its attibute.... It's an INDUSTRIAL metal. Well, kids, I have ALMOST no faith in a lasting recovery or a return to consumption of goods requiring silver.
Could be wrong.
BUT..... My GOLD investors never took a HUGE hit. Silver....constantly.
Silver is very hard to find at low premiums when it is cheap because so many poor (remember, silver is the POOR man's gold) people are trying to take advantage of the low price and BUY.
OOPS..
None to be had. No one is dumb enough to dump it CHEAP.
AND...on the other hand, the premiums JUMP when it is cheap and FALL when it rises.
Simple supply/demand economics.
Gold, on the other hand holds a fairly constant spread due to the liquidity of the market.
If you're a true NEWBIE, get gold/silver in 50-50 ratio.
As you progress, tilt your concentration to gold with SOME silver.
END GAME should be close to ALL GOLD!
History validates my opinion.....even if it turns out not to be the FUTURE history.
I have WATCHED, PARTICIPATED, and CONSOLED too many silver guys over the years to change MY opinion.
GOLD is MONEY.
Now go forth and prosper.
If funds are an issue, numismatic bulk silver can't be bad. Low/no premium 90%, hard to lose with that...and nice to play pirate with.
Bulk MS64 PCGS Saints are STUPID cheap.
I...think.
heh
Even HRH said long ago.... "Go long on gold". It's been a foregone conclusion for over a decade, now. At least for me, if not many others. And people who don't know cheap, never bought the yellow stuff when it was $1900 in the market(as a commodity). And people who know cheap were buying it (generic Saints when it was less). The time factor of real money is for real. Gold is money that , over time, will work for the person who knows how to use it, as any tool is used in production. As to numismatics, you bring up an excellent topic.
I think the more one studies metal, the more one studies the market. And the more we study history, the more often we see it repeat itself. Long story short: I agree with you and "stupid cheap". And the real coins are better than gold. We like to call them "generic". They may be, but ...
Other sites that have good information on a day to day basis include:
321gold.com
goldseek.com
safehaven.com
kitco.com (especially their gold and silver forums).
jessescafeamerican.com.
chartsrus.com (historical gold and silver charts).
And most of those provide links to other sites. Caution: take everyone's opinion with a grain of salt, especially the gurus who post on the precious metal websites above. Develop your own base of knowledge and form your own opinions.
"Dips like this are for guys like you."
Don't take my advice. Just dip your toes a little at a time.
Keep it in your budget and keep it to yourself.