Best Place to Start?

[KevjustKev]

Right chaps

Thinking of stepping to the world of this stuff

What do you think is the best way to start off with platinum?

1/10 or 1/4 oz coin a 1/2 oz?

If so, are any better value than others?

any help would be nice.

Type about this for a bit🙂

[Tattoedamat]

Personally go as big as you can for lowest premiums

[Paul]

with supply shortage, business closed, delievry impacted - park your funds into bullionvault or goldmoney

your spread is going to be miniscule compared to what retail premiums for actual physical are currently

[KevjustKev]

1 hour ago, Paul said:

with supply shortage, business closed, delievry impacted - park your funds into bullionvault or goldmoney

your spread is going to be miniscule compared to what retail premiums for actual physical are currently

Being a Kev of little brain, I have no idea of how that stuff works

[Stuntman]

If you really want some physical, a 1 oz Platinum Britannia is probably your best route in at the moment.

But I agree that the premiums are very toppy (and increasing), even though the spot price appear cheap (about £600 per ounce at the moment).

ETFs are a good way in.  I hold SPLT which is an iShares Platinum ETF which (according to them) is backed 100% by physical platinum bars.  

 

As you're in the UK (well, the edge of the Fens, anyway😊 ) you can buy these ETFs by having an account with a share dealing platform (I use Hargreaves Lansdown) and then create an account.  You can also hold these ETFs in an ISA or a SIPP.  That's how I do it.

I hold 4 oz of physical platinum too: a Britannia and 3 Queen's Beasts.

 

[Tattoedamat]

A cavandish stocks&shares ISA which gives you a Fidelity account is another way to get ETFs

[Pete]

Premiums have risen on platinum coins most probably due to the lack of inventories caused by Coronavirus and also following a dramatic temporary dip in spot which made platinum look really cheap. Those who were quick off the mark bought the store. Dealers are possibly trying to profiteer during the platinum famine.
I would hold back until everything settles then once supplies are restored see what's on the market.
Keep an eye on prices at the European Mint and GS.be and avoid the 20% UK VAT until the end of the year at least.
Some lucky buyers of platinum might be selling later in the year.
Also the premiums on fractional ounces seem way too high so look for full ounces if you can.

[sovereignsteve]

Can anyone explain why you would want to hold physical Pt as opposed to paper?

[KDave]

4 minutes ago, sovereignsteve said:

Can anyone explain why you would want to hold physical Pt as opposed to paper?

The standard gold bug mantra about removing counter party risk is the only legitimate reason I can justify, otherwise its about having something shiny.

[Melon]

1 hour ago, sovereignsteve said:

Can anyone explain why you would want to hold physical Pt as opposed to paper?

1 hour ago, KDave said:

The standard gold bug mantra about removing counter party risk is the only legitimate reason I can justify, otherwise its about having something shiny.

Depends what you're buying it for doesn't it. If you're buying it because you see potential profit in the short to medium term I can see why paper may be favourable. If you're buying it to hold long term as a security against a wider portfolio of investments, then to my mind paper PMs don't achieve the aim. 

Also, it's shiny. 

[KDave]

15 minutes ago, Melon said:

Depends what you're buying it for doesn't it. If you're buying it because you see potential profit in the short to medium term I can see why paper may be favourable. If you're buying it to hold long term as a security against a wider portfolio of investments, then to my mind paper PMs don't achieve the aim. 

Also, it's shiny. 

Yes I knew it 

[Stuntman]

If you're primarily concerned about playing the investment opportunity, I would say buy paper (especially if it's backed by physical);.

If you like having the shiny things and resale is secondary - buy the physical at a good price and enjoy looking at it.

I love my physical coins!

[Horse]

I'm new to this game but followed the advice of diversification.  Managed to get a 1oz APE at a decent price, given the current situation.  I wouldn't mind adding another ounce while prices are low.  The Big Five series would be nice to have complete but that's a lot of Pt.  Maybe just another Eagle in the future.  I'm guessing the Britannia is about the same ease for resale/liquidity in the UK as the Eagle is for us in the states? 

[HerculeHolmes]

On 14/04/2020 at 22:36, KDave said:

The standard gold bug mantra about removing counter party risk is the only legitimate reason I can justify, otherwise its about having something shiny.

I've never heard this argument resolved yet. I'm a stacker not a collector, and I don't even care what the metal looks like - when the novelty of shiny coins has worn off, it could be a stack of plastic credit cards for all I care. Which IS the better deal? Physical metal or paper? I hear a lot of people warning against paper without explaining what it is they are afraid of, so I'm still none the wiser. The only reason I started buying physical metal was because I got the impression that "paper gold" is risky.

[KDave]

8 hours ago, HerculeHolmes said:

I've never heard this argument resolved yet. I'm a stacker not a collector, and I don't even care what the metal looks like - when the novelty of shiny coins has worn off, it could be a stack of plastic credit cards for all I care. Which IS the better deal? Physical metal or paper? I hear a lot of people warning against paper without explaining what it is they are afraid of, so I'm still none the wiser. The only reason I started buying physical metal was because I got the impression that "paper gold" is risky.

The questions I think about;

How will you sell. Exit strategy. Selling costs, market (liquidity) and risk (physical has selling risk). 

How long are you expecting/willing to hold the position for. Which is the cheapest vehicle over the expected and worst case term.

What are the risks of holding each vehicle over the term. What risk am I willing to take over the term.

[Guest]

On 14/04/2020 at 22:28, sovereignsteve said:

Can anyone explain why you would want to hold physical Pt as opposed to paper?

I've been thinking about this since I started stacking and came to few conclusions. This is by no means the answer to the question, but hopefully a different perspective to the debate.

It comes down to two things; risk and trust (which @KDave has also asked before I had pressed that submit button!).

Having something physical in your hand that you know you own outright, and you know is of high monetary value, provides a sense of security and a low risk of that physical PM depreciating in value quickly (that is a generalised statement for the sake of the argument since gold prices can fluctuate depending on how the sun, earth and the planets are arranged - gold prices are pretty much like Schrodingers Cat, until when trading stops, you don't know if gold has gone up or down! 🤣) 

On the other hand, with paper investments, you are investing your money into a company who then purchases the PM in your name but then manage the storage etc. of it. This is where the both risk and trust become flaky because all you have is a piece of paper stating what you own, but not the physical PM in your hand. And then there is the risk being the possibility of that company going bust and you losing your hard-earned invested money along with it.

The same thing applies with your cash and UK banks. As they are private, (except with RBS of course), should they go bust then only the first £85,000 of your money will be recovered to you under the FSCS scheme. That means if you had £100,000 saved in a UK bank and it went bust, then you'll only get £85,000 back. However, you can mitigate this risk by saving into an account that is 100% backed by the Government - that being NS&I, since the chances of the UK Gov going bust is negligible (though not improbable). To further mitigate the risk, using something like NS&I allows that cover limit of £85,000 to increase up to £2 million. (Also, as the BoE has effectively removed interest, which is great for mortgages and rubbish for savers, during the COVID-19 situation, you might as well just have somewhere to put you savings into to access at any time, no point trying find an savings account with good interest return since everyone is starting to tighten their purse strings.)

Places like BullionVault are obviously private with various shareholders etc. and operate in multiple jurisdictions. But an alternative to them would be something like the RoyalMint - since their only shareholder is HM Treasury, which again, the chances of going bust are negligible. Although not everyone would like to have their gold stored in London, when Zurich is more appealing.

Also, having something backed by the government promotes trust (again, a general statement here, please don't shout at me as opinions would differ) and has that sense of security; rather than going with a private company where you have invested thousands of money into with high chances of going bust.

I am NOT saying that BullionVault et al. are going bust or that they are shady etc., I am just saying it all depends on your appetite for risk and trust. For me, and having to deal with cybersecurity risks daily, I am always looking at trying to mitigate risks; and so for me, places like RoyalMint and NS&I where they are backed by the Government, fit that criteria personally.

Currently, in the short-term, buying physical bullion is somewhat expensive with gold prices being high (though this is starting to fall) and supply chains having issues with getting stock etc., so it might be worth putting that money aside into something like BullionVault where at least you have invested in some PM. And they are good in that sense where you can put in what you can afford, i.e. put in £20 a month instead of having to wait to build up enough to buy a half-sovereign by which time prices may have gone up. Once prices have stabilised to your liking, then you can withdraw that money and then purchase physical bullion from a dealer. This is my thinking at the moment, as you don't want to put all your money into one thing - spreading out increases diversity but all lowers that risk 😉

Thoughts and opinions about this are welcomed - everyone's view is different and I would be interested to learn different viewpoints 😊

Thanks,

C60

PS - also, just thought of this, age kinda plays a factor as well, since the younger generation are growing up with digital currencies like BitCoin, and so their appetite to risk of buying high-value items like PMs through places like BullionVault are much lower compared to the older generation whose sense of trust in someone holding their cash is significantly lower.

[KDave]

Excellent post above take heed.

'Means' is definitely a consideration in the equation of cost vs risk; if you have £20 a month to invest that limits your options and may decide your strategy for you.

There is another aspect to all this, it underlies everything (in terms of perception of risk especially) in the "know thyself" adage I keep seeing in these retail investment books. If buying vaulted or an ETF paper is not going to keep you interested (or invested) like a shiny coin will, then that changes the equation doesn't it. £20 a month into bullion vault might be completely acceptable psychologically, compared to £20 a month into a cash account in order to later buy physical. There is a balance somewhere between cost, risk and means, under a backdrop of human nature and tendencies. Good luck working it out let me know if you do  

[Guest]

42 minutes ago, KDave said:

Excellent post above take heed.

Thank you! You're making me blush 😳

42 minutes ago, KDave said:

'Means' is definitely a consideration in the equation of cost vs risk; if you have £20 a month to invest that limits your options and may decide your strategy for you.

There is another aspect to all this, it underlies everything (in terms of perception of risk especially) in the "know thyself" adage I keep seeing in these retail investment books. If buying vaulted or an ETF paper is not going to keep you interested (or invested) like a shiny coin will, then that changes the equation doesn't it. £20 a month into bullion vault might be completely acceptable psychologically, compared to £20 a month into a cash account in order to later buy physical. There is a balance somewhere between cost, risk and means, under a backdrop of human nature and tendencies. Good luck working it out let me know if you do  

Yes - the means/motivation of doing it does play a crucial role. If you don't have the motivation to do something like this, then you are wasting your time; and how you do it, either buying physical or not, is important. I'm not so interested in shiny coins, but more on knowing that in 20/30 yrs time when I come to retire, I know that the PM I purchase will still keep their value, if not increased when I come to sell.

I think putting £20 a month into something like BullionVault will "probably" give you a slightly better return when you come to sell and withdraw your money to then buy physical bullion (depending on gold price at the time), whereas with such low interest rates on current accounts and savings accounts (and that the interest is compounded and paid in yearly by most banks), won't give you as much. But that is me being slightly pedantic and picky 😅

Thanks,

C60.

[KDave]

Gold? If for 20 or 30 years I would expect physical delivery to be far cheaper and lower risk than vaulted, add up the fees for 30 years of storage and you are likely looking at significant costs. But as you say £20 a month limits options, I would perhaps do this then look into making an annual withdrawal or sell and buy physical but only if the costs make sense?

Platinum is a different case as the premiums are high at the moment and the market is smaller, when it was 9% premium for an ounce it was worth doing, now though paper might be the better option depending on length of time investing. But with physical gold premiums are so low on both buy and sell (low spread), the infrastructure is in place to be highly liquid and it has history and monetary nature that make non physical alternatives more risky but its all judgement and opinion. 

It might make sense on the numbers as well as the psychology as I discarded vaulting for gold in both cost and risk over that length of time, perhaps it has changed, but either way its all a judgement and each must decide for themselves.

[Guest]

5 hours ago, KDave said:

Gold? If for 20 or 30 years I would expect physical delivery to be far cheaper and lower risk than vaulted, add up the fees for 30 years of storage and you are likely looking at significant costs. But as you say £20 a month limits options, I would perhaps do this then look into making an annual withdrawal or sell and buy physical but only if the costs make sense?

Platinum is a different case as the premiums are high at the moment and the market is smaller, when it was 9% premium for an ounce it was worth doing, now though paper might be the better option depending on length of time investing. But with physical gold premiums are so low on both buy and sell (low spread), the infrastructure is in place to be highly liquid and it has history and monetary nature that make non physical alternatives more risky but its all judgement and opinion. 

It might make sense on the numbers as well as the psychology as I discarded vaulting for gold in both cost and risk over that length of time, perhaps it has changed, but either way its all a judgement and each must decide for themselves.

Oh for sure with storage fees! They definitely need to be considered if you want long term storage - being physical or via online.

That’s why I think using services like BullionVault for short term investment “could” be better over long term. Storage fees also increase with the amount of gold is stored as well as the price of gold too. So in Q1 you could have a low invoice for storage but if gold increases in Q2 then the storage fee also increases. And some places like BullionVault have a minimum storage fee and others don’t.

And then don't forget VAT is added (😒) and could increase or decrease which will also alter the storage fee. As of this, storage fee is an additional cost which something that I don’t really want to pay out 😂