How important is it to have a stacking plan?

[pamplemousse]

I'm pretty new at stacking and have mostly been focused on getting the most weight for the lowest price. I have a mix of coins, bars, and junk silver, but I don't have any premium coins. What are some approaches to developing a stacking plan, what considerations should I be making before I get too far into my stack? Ease of liquidation, storage, desirability, are all worth considering, but how does each type of silver address these concerns?

Any input would be greatly appreciated 

[Stuntman]

Plan how you will exit.  What price will you sell your stack at, and how will you sell it?  Answering those questions will have a bearing on what you stack and how you stack.

[Aknot]

"What are some approaches to developing a stacking plan"

Its just like any other plan. You look and create a goal or end to the plan. Do you want to fli,p are you investing, will it be passed on are you just "collecting". Why are you doing this?

Then you take the end goal and create a date if there is a date if not.....

Then you decide how much you can afford to do "X" to get you to your goal or get you to place you are comfortable with.

Because it is a changing market you need to plan for that change. 100$ this month doesnt get (or may get more) next month.

The only thing worth considering is what you want to do then ensure you dont go broke doing it.

I dont have a plan.... I just buy stuff when I feel the price is right and if I have the money. It wont be sold any time soon (i hope) and will either use it to supplement my pension and retirement/401ks or sock some/all of it to pass to my son.... so I guess I do have a plan...

[StackerNoob]

First off ask yourself why you are buying silver? What’s the end goal? What are the secondary goals? Are you thinking short, medium or long term? And what is your risk appetite?
 

Start with those basic questions. They will inform almost all of your decisions. 

 

[pamplemousse]

3 hours ago, Stuntman said:

Plan how you will exit.  What price will you sell your stack at, and how will you sell it?  Answering those questions will have a bearing on what you stack and how you stack.

That's a good question. How exactly do you pick a price that's not just a shot in the dark? I've heard lots of 100$ predictions or higher, and though I understand those prices are possible if inflation really ramps up but then your purchasing power would also probably be affected. At some point I'm interested in swapping some of it out for gold, as I know the ratio is pretty whack right now, but when it comes to picking a price point for selling it, how do you figure that?

How do you sell silver? What have people found to be the best way to unload their silver when they want to? Local ads, a LCS, reddit, forums, etc. Also, how do you figure out the premiums? Like I know that all of us with precious metals are technically dealers, but how come when I go to a LCS I have to accept whatever below spot price they give me whereas when I buy privately no one is willing to budge on the price? Likewise when selling with a premium, how do you properly price a premium when selling your stuff?   

To answer other people, my plan is medium to long term. I could potentially see myself passing part of it off to children when I have them, but for now I think of it as a medium term investment that I could possibly make gains on and hedge against the c**p that's about to hit the fan. As I get more I am finding it pretty and I like just having it, so I can see myself keeping some of it for a while, but will probably cash most of it out or trade it for gold at some point. 

 

Sorry I'm overloading everyone with questions. Long day at work and just had a chance to get back to all the responses. I appreciate all the quick and helpful feedback though!

[Robda1986]

Even shots in the dark have to hit at some point I have a gsr ratio target I'm aiming for when I can swap silver to gold at that point bye bye silver helo gold then when gold hits a decent gsr swap back and slowly liquidate the extea and use that to supplement my income 

[HawkHybrid]

'if one does not know which port one is sailing, no wind is favourable'

 

a stacking plan is one of the most important things you need to have, as it should apply

your understanding (and later on experience) of the metals.

 

consider what is the purpose of buying the item, the purpose of holding onto the item, and

if appropriate the purpose of selling the item.

 

HH

[SierraWhiskyMike]

On 06/08/2020 at 18:47, pamplemousse said:

 I have a mix of coins, bars, and junk silver, but I don't have any premium coins. What are some approaches to developing a stacking plan, what considerations should I be making before I get too far into my stack? Ease of liquidation, storage, desirability, are all worth considering, but how does each type of silver address these concerns?

I hear you. I'm new to this but I have a kind of plan in place - because PMs are only one (well, 2) categories of assets I plan to have in my portfolio.

I totally recommend that you *have* a portfolio of assets, not just silver and gold. Assets tend to fluctuate and ideally you want one to be in significant profit at the time you draw down and sell stuff off. To make sure that happens, you want PMs and equities or whatever, pairings that move in opposite directions. At least, if you see this as an investment, which your post suggests you do!

My plan is quite simple: I want to build up to have at least a year's expenses in gold and 3 months in silver by the time I want to retire. That way if my pension shares/ funds aren't doing well I can use the PMs to live on until the market recovers.

To do this, I want silver and gold that's easily liquidated and I primarily want royal mint silver as it's CGT exempt. I go for state sponsored coins because despite the premiums they are their own guarantee of the quality of the metal at the point of selling them - anyone can Google a coin's features and make a basic verification, which means more potential buyers, right? I have bought a couple of valiants to add variety but my silver stack is Britannia-heavy and will be so for the foreseeable future.

On the whole, I'm staying away from high premium coins unless the price is right. For example, I bought a white horse of Hanover coin for £40, which wasn't much more than 2 Britannias at the time, however I expect to sell that one soon or swap it for other government minted coins.

Gold wise, I have a couple of 2020 sovereigns. I like them for both the ease of liquidation to a dealer or on secondary market and the low premiums on them. That said, having monitored a few secondary market sites I plan to get fractional Britannias as well as I can get most of the premium back as resale. Should I become filthy rich one day and inhabit the kind of circles where people will happily part with a full gold ozt -sized cash then I will look to go for the 1ozt coins but I'm a long way off yet!

Does that help?

The danger with silver and gold is that it's also fun. There's nothing wrong there but I don't want to go too far down the fancy coins and end up paying above the odds for a design that might only get spot value at later sale. For example, I like the Britannia bars but at the moment the premiums don't make sense and I won't pay £290 when I can buy 10 x Britannia coins for £27 from Germany.

[pamplemousse]

5 hours ago, SierraWhiskyMike said:

I hear you. I'm new to this but I have a kind of plan in place - because PMs are only one (well, 2) categories of assets I plan to have in my portfolio.

I totally recommend that you *have* a portfolio of assets, not just silver and gold. Assets tend to fluctuate and ideally you want one to be in significant profit at the time you draw down and sell stuff off. To make sure that happens, you want PMs and equities or whatever, pairings that move in opposite directions. At least, if you see this as an investment, which your post suggests you do!

My plan is quite simple: I want to build up to have at least a year's expenses in gold and 3 months in silver by the time I want to retire. That way if my pension shares/ funds aren't doing well I can use the PMs to live on until the market recovers.

To do this, I want silver and gold that's easily liquidated and I primarily want royal mint silver as it's CGT exempt. I go for state sponsored coins because despite the premiums they are their own guarantee of the quality of the metal at the point of selling them - anyone can Google a coin's features and make a basic verification, which means more potential buyers, right? I have bought a couple of valiants to add variety but my silver stack is Britannia-heavy and will be so for the foreseeable future.

On the whole, I'm staying away from high premium coins unless the price is right. For example, I bought a white horse of Hanover coin for £40, which wasn't much more than 2 Britannias at the time, however I expect to sell that one soon or swap it for other government minted coins.

Gold wise, I have a couple of 2020 sovereigns. I like them for both the ease of liquidation to a dealer or on secondary market and the low premiums on them. That said, having monitored a few secondary market sites I plan to get fractional Britannias as well as I can get most of the premium back as resale. Should I become filthy rich one day and inhabit the kind of circles where people will happily part with a full gold ozt -sized cash then I will look to go for the 1ozt coins but I'm a long way off yet!

Does that help?

The danger with silver and gold is that it's also fun. There's nothing wrong there but I don't want to go too far down the fancy coins and end up paying above the odds for a design that might only get spot value at later sale. For example, I like the Britannia bars but at the moment the premiums don't make sense and I won't pay £290 when I can buy 10 x Britannia coins for £27 from Germany.

Yeah, I find your points pretty helpful. I'm looking at starting more investments that are negatively correlated to PMs so that in any circumstance I'll have something doing well. The plan to have 1 year of expenses covered is a idea and might be something for me to consider.

The point regarding state sponsored metal being easier to liquidate is probably a concern that would be more obvious when the market isn't as hot as it currently is, which is a useful thing to consider. I tend to get more generic stuff because of the lower premium. Ultimately I'm trying to get as close to spot as I can with my buys, but I know sometimes the premiums can be worth paying if you're able to liquidate faster.  

I guess ease of liquidation is one of the more important things for me, but also the ease of trading for gold. I don't know how likely it is that I'll be able to trade my silver for gold, but if it happens I want to have the type of silver that would attract a gold owner. Not sure yet what that would be exactly, but I've got some variety so I'm hoping that some combination of my stack would work for that. 

I'm curious about people who have lots of gold, what would prompt them to trade it for silver at a low ratio?

[SierraWhiskyMike]

2 hours ago, pamplemousse said:

I'm curious about people who have lots of gold, what would prompt them to trade it for silver at a low ratio?

I don't think anyone would due to the relative stability of gold vs. silver and the greater concentration of wealth in gold.

If that kind of thing happens, it's more likely to just be a sale of silver then purchase of gold from the proceeds. 

The only way that I would trade a sovereign for silver myself is if the gsr was heavily in my favour and I was getting, say, 100 ozt of silver Britannias for a beaten-up sovereign but that would be so that I could sell a lot of silver later to buy a new gold coin.

I do like silver and I buy silver but trading often doesn't fit in with my plan.

[BSquared]

Quote

 

I guess ease of liquidation is one of the more important things for me, but also the ease of trading for gold. I don't know how likely it is that I'll be able to trade my silver for gold, but if it happens I want to have the type of silver that would attract a gold owner. Not sure yet what that would be exactly, but I've got some variety so I'm hoping that some combination of my stack would work for that. 

I'm curious about people who have lots of gold, what would prompt them to trade it for silver at a low ratio?

Now, this is just my opinion but,  you need to think of silver as primarily an industrial metal, and gold as having world-wide intrinsic value compared to paper money.  Both are subject to changes for a variety of reasons but gold tends to be more related to strife/risk and currency valuations world-wide and silver as to industrial demand.   As such,  I'm not sure that thinking a "gold investor " has much interest in buying silver unless the market it moving rapidly, makes much sense. 

If you find a particular silver series that interests you, I would focus on that one, collect it in depth, you will enjoy owning and showing them, and you will be rewarded with sell premiums, if you've made a good choice.  Otherwise, just focus on bullion,  whatever gets you the lowest premium over spot in your particular situation.   

FWIW, silver does tend to get pretty heavy very quickly as you accumulate it.   I love silver but that is a big issue.

[Stuntman]

In terms of physical PMs I have a lot more gold by value than I have silver by value.  There are very few circumstances in which I would trade physical gold for physical silver and I agree with the recent posts above regarding why that might be.

I use ETFs for most of my Silver and Platinum 'investment' purchases, and then buy the nice pretty shiny physical items that I actually want to enjoy looking at!

[fastlanwan]

If you are buy solely for art, you do not need a plane.

If you are buying to stack or flip then you must have a plan to include receipts of sales. I gives you guidelines to achieve your goal. Otherwise you will buy using you emotion which is a terrible way to get any success let alone regular success on a focused plan. Focused on getting in and out to remove emotion as much as possible.