Your thoughts on stacking silver in 2020 (newbie post)

[Metalmonk]

Hi, i'm new to purchasing precious metals and have been collecting for a few months. Given the economic uncertainty in 2020 and the current price of silver, i'd like to hear from others about their thoughts  on starting a collection at this time. I would greatly appreciate any tips on resources i could look into regarding precious metals, whether they are relevant to beginners or the current year. 

Thanks

[poundofcoins]

Hi metalmonk, welcome to the forum. I am a forum newbie myself but have collected coins in various guises over the last three decades but have only bought precious metals over the last six or so years.

Just for record, I don't want anyone to construe what I'm about to say as investing advice. At this juncture, I am trading in (i.e. buying and selling for profit) and collecting silver (as well as other coins). I don't see the rather rapid, recent rise in the price of silver as a reason to stop any of this. 

The main things I bear in mind when purchasing coins for collecting are what sort of prices will I get for the coins when I come to sell them in the future and why am I buying these coins in the first place. Now, for me, the vast majority of what I have is not slabbed/uncirculated/low mintage stuff that you tend to see on certain youtube videos. I imagine that over the next year or so, I shall be divesting myself of some coins on this forum that no longer wish to keep and will be buying other things that suit my anticipated needs over the next decade(s) better.

In my opinion, there will be differences in the types and volumes of silver coins bought by people in the following categories: those seeking a profit/buying for investment purposes, those seeking a safe haven/insurance, those who want to keep their money out of the system as well as those who are simply collecting/stacking. Of course, there are other categories; this is all I could think of, off the top of my head. Obviously, I'm not going to give you an inventory of what I have, but the few coins that I do have reflect my reasons for holding silver.

In terms of resources, I have basically used youtube. You get a wide variety of videos on offer with people showing their collections or explaining why they have what they have. The good thing here is that youtube allows you to: see other related videos, preview frames of the video to get an idea of whether it's just a piece-to-camera or whether you'll get to see some actual coins and, most importantly, playback the videos at increased/decreased speed.

I think I've said enough for now to get the ball rolling; your message was the only one there when I started composing this message. I've tried to make this as coherent as possible but let me know if you'd like anything explained further.

[5huggy]

2 hours ago, Metalmonk said:

Hi, i'm new to purchasing precious metals and have been collecting for a few months. Given the economic uncertainty in 2020 and the current price of silver, i'd like to hear from others about their thoughts  on starting a collection at this time. I would greatly appreciate any tips on resources i could look into regarding precious metals, whether they are relevant to beginners or the current year. 

Thanks

IMHO - It should not be detrimental to "START" now and in "theory" you are (and many others recently) MILES AHEAD of the general population ! (BTW - thats the WORLDWIDE 😲)

The important bit is are you stacking for  - > >

1) quick (Flip) profits  - - or

2) Long term Wealth storage!

For 1) - be careful with SILVER spot price volatility and choice of "flips" some do WAY better than others! (takes a lot of DUE DILIGENCE on choice! 😉)

For 2) - £/cost average at lowest spot price possible! for BULK of your stack - only get premium coins that you REALLY like for really LONG term (ie Inheritance possibly)

ALL IMHO! 👍

[Wallybanger]

I buy purely for the base metal and try to buy as close to spot as possible.  Personally, I buy purposely for the reasons stated above.  Wealth storage, flipping profit (if possible but the margins make that difficult) and definitely to keep my money out of the system.

This is a really, really good time to get your liquid assets out of paper and into PMs.  Best case scenario, US goes back to a metal based system (which I'm having a difficult time seeing) and PMs go nuts.  Worst case scenario (and I think the most likely scenario), the US rides the fiat dollar into the ground like the guy riding the bomb in Dr. Strangelove and any savings you have that aren't in physical assets will become worthless.

[Silverscrooge]

I try and buy some silver every couple of months, if I feel the price is too high I will buy less and if it is cheap I will buy more. Buying silver regularly over a long period is a good way to average out the cost. I keep all my receipts and one thing is certain...the price goes up and down and it is tough to predict future prices.

https://www.youtube.com/channel/UCThv5tYUVaG4ZPA3p6EXZbQ

This you tube channel is worth watching, Mike Maloney is a precious metal guru and he also provides a free e book guide to investing in precious metals. His videos will tell you all you need to know about money ...

[Divmad]

You all must be American forum members, because the notion of buying Silver 1oz coins as close to spot a possible is a non starter here in the UK. The reputable online coin dealers are seeking 2020 1oz Silver Britannia's at £27 + 20% vat, so that's around £33 Vs spot of £20.50 today. It makes the idea of buying Silver as an investment a mockery as you need a 50%+ appreciation in the underlying commodity just to break even if you try to re sell back to the very same dealers. "Investors" are banking on selling back to other collectors via forums like this or E Bay, using the greater fool theory, to make a profit. 

A total sham, this silver stacking business. IMHO. DYOR. 

[HighlandTiger]

Buying 0.999 silver coins in the UK for bulk stacking purposes is not the greatest financial plan in the world. The vat kills it. However we can still buy cheaply from Europe, although who knows how that will go post Brexit. 

However it's possible to buy sterling silver flatware and sterling silver (and .500 silver) coins at around or under spot, and most dealers will give you at least 88% of spot, so the spread is much lower.

My advice (for what it's worth), is that unless post Brexit the UK changes its rules on vat on silver, it's best to stick to sterling silver.

Unless of course you like buying coins and trying to flip them to make a profit from collectors. Unfortunately, most people rarely make a profit doing that, and usually end up taking small losses, (something they'll never admit to)

 

 

 

[Chronix]

Everybody is talking about high premiums these days, but are they really???

Just yesterday i sold couple of ounces to a reputable dealer for 24 pounds per oz. Spot price was around 20. Usual prices yesterday were 25-26 pounds/oz. 

Anybody else realises that? 

[Stacktastic]

8 hours ago, Silverscrooge said:

I try and buy some silver every couple of months, if I feel the price is too high I will buy less and if it is cheap I will buy more.

What he said. I have stopped buying physical and started to invest in mining, so thats an option also I would say. Im waiting to see what happens in november & usually the prices drop in December also, looking at the charts. But this is not a usual year. 

Long term investments are probably a good idea as the difference in spot & premiums will be negligible if you intend to hold for a long time because the premium as a collectors item combined with what is projected as much higher silver prices (ignoring inflation) should make a profit, at the very least hold the same value as when you bought it, which is more than can be said for paper money! 

UK non CG coins are the first obvious choice as they are technically legal tender. I personally prefer full sets of the Queens beasts as I think, although very common, they will gain value, especially in a presentation box in 20 years time. Its also good chunk of cash converted in one hit & you may be able to get a good deal. I spent £550 on a complete (to date) 2oz QB set in May. no idea what thats worth now, but its most certainly gone up.

I think Platinum is also a good long term hold, its undervalued, but more speculative that mind you. Having said that it shot up in the last downturn, so might make a good short term investment (although platinum coins are hard to sell, for some reason? The metal is stunning if you ask me). 

[Moi]

Good time to start, even an ounce or two per month puts you in a decent start.

[Aknot]

2 hours ago, Moi said:

Good time to start, even an ounce or two per month puts you in a decent start.

This right here.

@Metalmonk The thing is you stated collecting. Collecting in itself is probably more expensive then stacking. So as other have posted you need to decided which (or "why not both") road you want to go down.

Collecting infers you are purchasing based on design, age or overall thought that it is a collectable item. Think a sports card. When rookie cards come out people buy them based on the possible collectibility of them (serial numbered, auto, prism, refractor) and the card it self increasing in price. A sports card is a piece of cardboard (most times) so a rookie card and a regular sometimes are made the same way but one is worth more just because the picture is different.

So move that over to coins/rounds/PMs. 1 once of silver is worth 1 once of silver. However if you take that silver and form it into a round coin like thing youve increased the price of it. Stamp something on that "round" and it probably goes up a bit more. Stamp something on there "pretty" polish it up make it shine and it goes up more. Do all of that and then stamp something else on it that is recognizable (and properly licensed)  like 007, Mikey Mouse and it even goes up more.

Then there are "bank backed" silver coins. Maple Leaf and the ASE are created by the Canadian and US Mint. They also "upcharge" on what is 1oz of silver.

I wont get into percentage based coins. That seems like an ever winding road. You could have a 90% that is worth more then the silver content. Or a 90% that is worth just the silver that is there.

However at the end of the day it is still.... 1 once of silver.

Here is my general rule of thumb when I buy ANYTHING that I may think can be later (either when I need it or pass it to my son and hopefully grandchildren ) sold.

1. Would someone else buy it? Usually someone will.

Now Im fairly new around here and fairly new to all of this. However there are generally 3 parties that I see the most around here. Not saying this is all inclusive and im not saying one is better than the other etc. Its just an observation.

Party One: The Survivalist. If you think the world will be going to terrible in your lifetime (or family down the road) Generic Silver. The mutants wont care if it is a Silver Maple Leaf, a 007 Round or a generic round from SMI. Its all Silver to them. Silver at the lowest price to "stack". Usually in smaller (1oz is the lowest I would really go but maybe a few lower just in case) weights so its easier to handle. If th emutant only wants 3ozs for you to cross the bridge and all you have are 10oz bars... well yeah.

Party Two: The Investor. If you want to diversify and "spread your investments" selling for example when you retire, need the money or just want to leave an inheritance. More Generic but use a little wiggle room when purchasing items that are possibly collectable and or will increase in price in the long run. I still think more generic as you would be able to move it easier/faster however the collectable stuff may give you more bang for your buck BUT may take longer to move.

Party Three: The collector. They purchase for the collectibility of the item, the design or the maker/artist. This appears to be the most expensive without a guarantee of return. BUT being a collector the money doesnt matter most times. Case in point I paid a bit more for a 007 Coin (big Bond fan) then I usually pay for silver. I also bought a Dan Marino coin below spot but got lucky I think. I will never sell the Marino and hopefully will never have to sell the 007.

Oh boy I rambled on....

Feel free anyone to add or correct me. Im still kind of learning all of this.

TLDR: Buy what you can afford for whatever reason you want. Just dont put yourself in the poorhouse.

[Moi]

I have found, some premium coins are pro rata more affordable recently. So the lines between these categories are porous. Just enjoy, even humble stacking silver is very shiney😉.

[Metalmonk]

@Aknot  Thanks for the reply,  i probably wasn't concise enough in my post. I'm primarily of the investor mindset and trying to buy close to spot. I should have been more careful about using the word collecting. That said there are a few collector pieces that catch my eye from time to time and i'm still trying to figure out my thoughts on purchasing and resale of those items.

@HighlandTiger  I'm of the same mindset and primarily buying gold and some silver on the side. I will probably only get silver from Europe or second hand from now on. Just hoping that Brexit doesn't put an end to importing it. Thanks for the info on sterling i'll have to look into that 🙂

[Divmad]

7 hours ago, HighlandTiger said:

Buying 0.999 silver coins in the UK for bulk stacking purposes is not the greatest financial plan in the world. The vat kills it. However we can still buy cheaply from Europe, although who knows how that will go post Brexit. 

However it's possible to buy sterling silver flatware and sterling silver (and .500 silver) coins at around or under spot, and most dealers will give you at least 88% of spot, so the spread is much lower.

My advice (for what it's worth), is that unless post Brexit the UK changes its rules on vat on silver, it's best to stick to sterling silver.

Unless of course you like buying coins and trying to flip them to make a profit from collectors. Unfortunately, most people rarely make a profit doing that, and usually end up taking small losses, (something they'll never admit to)

 

 

 

Given the parlous state of the UK Government's public finances after Covid-19, I am very concerned that Sunak will also a CGT on silver bullion, and maybe Gold bullion as well, in his raid on UK residents with assets to sell. And that is on top of a sure thing escalation in the CGT rate itself. I presume that trading in silverware is already subject to CGT.