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If you want to make money from silver don't buy coins


HighlandTiger

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I'd like to make some observations, and right at the start I'd like to say that this post is NOT aimed at collectors, (who will buy any old tat if if fits into their collecting sphere) or members in the US, (who are able to buy silver coins at a few dollars above spot), but more aimed towards the British/EU newbie who is just getting into the silver game with an eye on making money from silver. Also this is my opinion for what its worth.... :)

But if you want to make money from buying and selling silver, then don't ever venture into buying silver coins unless they are the cheapest generic 1oz coins, (Philis, Maples, Eagles, Noahs Ark etc) and you can buy them at £2-£3 over spot or less.

I joined this forum many moons ago, when it was in its infancy and only a few hundred members, and I fell for the hype from the "experienced" forumites, who were pushing lunars, Brits, slabs, proofs, limited runs etc. Claiming these were sure things etc. Now I hold no blame but my own on this, by following their advice and suggestions. But I fell for it hook line and sinker. More fool me. You see, the only way you can make money from the premium silver coins is to flip within the first few weeks after coming on sale. I can guarantee the longer you hold onto them the more money you will lose.

I have a ton of stuff purchased when silver was half the price it is now, and practically all of the proofs, lunars, low mintage type stuff, are selling for less now than it was 5-6 years ago when I bought it, (and I bought it usually at less than the going rate at the time, as I was obsessed at getting the cheapest possible). The only coins that have held their value is the cheapest stuff, the bog standard generic bullion, milk spots and all. I was paying around £2-£3 over spot then and I can still buy/sell at £2-£3 over spot now. 

So my advice to newbies, if you are looking to maximise your return on your investment by holding physical silver, you have two options.

1. Keep away from proofs, limited runs, lunars, slabbed coins, hand poured bars etc, (unless you are a collector who doesn't care about value), and buy generic 1oz silver coins, and don't pay more than £2-£3  over spot. These generic coins will give you a better return as the silver price rises.

2. Keep away from coins completely, and buy the cheapest silver you can find. Be it chains, rings, flatware etc. Things you can buy at around or under spot. Their value doesn't rely on the fickleness of collectors and solely relies on the spot price rising and falling. 

So in conclusion, if you you wish to make money holding physical silver long term, do not buy anything that could be deemed as a collectible . I can guarantee that you will lose money long term, (unless silver goes to £50+ an oz, and you might be able to break even, by selling for scrap)  

 

Feel free to shoot me down ;)

 

 

 

 

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I've just started collecting/stacking, I understand where you are coming from. Personally I will only be buying Brits or small bars as I have no interest in proofs or special coins in silver. As for gold looking to only buy fractionals, sovs, halfs and 1/10ths. 

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In the early days I bought coins and minted bars generally, and got them as cheap as I could. I didn't really go in for premium coins in premium condition as I thought it'd be better to hold stuff that wasn't necessarily aesthetically perfect to begin with. I guess my risk was relying that the price of silver would go up. 

I would probably add to the OP that melted bars are the way to go if you want silver. They are by their nature imperfect looking and often people value older bars' toning. A point to consider even if you don't agree. 

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I think you can actually make money by buying silver bullion coins, but I agree that you can make more money by buying scrap silver.

Depends what you're doing it for, how long you are prepared to hold the silver, and how much pleasure you get from just looking at it 😀

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I agree with your view towards proofs and so called collectables in that you pay well over the odds for them and then struggle to sell for spot. They are a scam from the mints to charge you more. Even the mintage is high on them somthey arent even that rare. You'll need a couple of hundred years to pass by before they become valuable from a profit point, but who will be around that long to enjoy any gain? 

I agree that to make best buck from proofs etc. you'd need to catch them on release for lowest price then flip them quick when you see demand from the FOMO crowd.

I only stack BU gold & silver coins and always try to buy at lowest price. Even avoiding VAT on my silver by buying from Europeanmint.com.

I keep to 1oz and 2oz silver coins and 1oz gold and also soveriegns.

Britannias, Queens Beasts, Maples, Liberties, sovereigns especially any CGT free mintages.

My stacking is for long term to protect wealth. The silver will be sold at profit when we reach a peak in this bull run and invested in somrthing else thats a bargain at that time. The Gold will be held for pension. I've been lucky up to now as all my purchases have been and are in profit and should continue to gain over thd next 5-10 years.

I stay away from "specials" for my stack as when you sell people only want to pay spot and the customer base for specials is limited in size so again limiting your entry to market. 

I have bought a few personal items for me like Austrian Ducats, 20 francs and a Proof set of Mexican Libertads and these are for me to admire as I love the designs. 

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8 hours ago, HighlandTiger said:

I'd like to make some observations, and right at the start I'd like to say that this post is NOT aimed at collectors, (who will buy any old tat if if fits into their collecting sphere) or members in the US, (who are able to buy silver coins at a few dollars above spot), but more aimed towards the British/EU newbie who is just getting into the silver game with an eye on making money from silver. Also this is my opinion for what its worth.... :)

But if you want to make money from buying and selling silver, then don't ever venture into buying silver coins unless they are the cheapest generic 1oz coins, (Philis, Maples, Eagles, Noahs Ark etc) and you can buy them at £2-£3 over spot or less.

I joined this forum many moons ago, when it was in its infancy and only a few hundred members, and I fell for the hype from the "experienced" forumites, who were pushing lunars, Brits, slabs, proofs, limited runs etc. Claiming these were sure things etc. Now I hold no blame but my own on this, by following their advice and suggestions. But I fell for it hook line and sinker. More fool me. You see, the only way you can make money from the premium silver coins is to flip within the first few weeks after coming on sale. I can guarantee the longer you hold onto them the more money you will lose.

I have a ton of stuff purchased when silver was half the price it is now, and practically all of the proofs, lunars, low mintage type stuff, are selling for less now than it was 5-6 years ago when I bought it, (and I bought it usually at less than the going rate at the time, as I was obsessed at getting the cheapest possible). The only coins that have held their value is the cheapest stuff, the bog standard generic bullion, milk spots and all. I was paying around £2-£3 over spot then and I can still buy/sell at £2-£3 over spot now. 

So my advice to newbies, if you are looking to maximise your return on your investment by holding physical silver, you have two options.

1. Keep away from proofs, limited runs, lunars, slabbed coins, hand poured bars etc, (unless you are a collector who doesn't care about value), and buy generic 1oz silver coins, and don't pay more than £2-£3  over spot. These generic coins will give you a better return as the silver price rises.

2. Keep away from coins completely, and buy the cheapest silver you can find. Be it chains, rings, flatware etc. Things you can buy at around or under spot. Their value doesn't rely on the fickleness of collectors and solely relies on the spot price rising and falling. 

So in conclusion, if you you wish to make money holding physical silver long term, do not buy anything that could be deemed as a collectible . I can guarantee that you will lose money long term, (unless silver goes to £50+ an oz, and you might be able to break even, by selling for scrap)  

 

Feel free to shoot me down ;)

 

 

 

 

Hi HighlandTiger,

I agree with you, you are 100% right.

The best think is to buy well known silver coins or rounds with milkspots and close to spot as possible. From my own experience, I will not recommend buying scrap silver or hand poured for the following reasons:

I bought 7 pieces of hand poured .925 hallmarked silver (almost 2.5kg) for over spot price. The hallmarks were from a silversmith shop from the north of England (I can't remember the name now) and it was hallmarked as .925. When I took this silver to Baird & Co in Hatton Gardens to check on the FRF gun, the purity of the silver was around .500-.700 (50%-70% purity instead of 92.5% purity). I sold it back to Baird and Co and got under spot for the pure silver content of the pieces, so lost about 30% to 50% of the price I paid for.

The other reason is that you can buy a premium silver coin today and it is beautiful and immaculate-just imagine a pre 2012 Britannia (and I only mention Britannias because in recent years they are bullion coins minted in the millions but still a lot of people on the forum will pay a premium over spot for Britannias when they are sold fresh out of the tube and they are notorious almost as much as pre 2018 maples to get milk spots). You keep it in your dark safe away from the daylight, in an air tight capsule and vacuum packed and in low humidity/dry environment and a month later, you take it out of the safe a month later to admire again and it happened that the coin has developed milk spots. You try to sell the coin for just over spot as it is not up to your collection's standard and you get offered spot. or just imagine a slabbed premium coin that will get milk spots. Big loss.

If you are buying silver to sell and make a profit, why even bother to buy physical silver, store it (risking all your physical silver to be stolen from you) and then having to go through the hassle of selling it. Its better just to stick to silver ETFs.

Hand poured silver always carries a high premium which you probably will never get back when you need to sell (I stated need and not want on purpose). The only time you will not make any loss is if the spot price of silver has gone up to and it has gone up by as much as the premium you paid. If you are a collector, price does not matter anyway as you are buying to collect and not to make any profits.

Buying 1 oz silver coins when spot is high is also not recommend. One example is 2011 American Silver Eagles, minted when spot was at £29 something and bought by people due to FOMO as thought that silver will continue to go up, up to £50 or £100. I still have about 16 of them and can not see me being able to sell them at £30. taking inflation into account even at £30 I would have made a loss. for the last year I have been buying silver coins every other day or but for the last 3 or 4 weeks I have not bought anything and will probably not buy anything unless close to spot or something really special that I really like (or I need to complete my collection like the ugly QB greyhound) as I am not willing to pay close to £30 or more for a 1 oz silver coin minted in the millions.

Some people also observe the gold to silver ration very carefully and sell gold to buy silver when the gold to silver ratio is high and sell silver to buy gold when the gold to silver ratio is low with the aim to keep the gold as their retirement fund or to sell the gold when the price is high to be able to then buy for example a property to live in.

From my own experience, if you think a coin is a bid too expensive, then it probably is. Don't be afraid of missing out, as there will always be a good deal coming up for the same coin but only if you wait. Don't go for the premium stuff unless you really want it. Buy cheap and as close to spot as possible. Modern Britannias (CGT) are bullion coins like maples, ASE's, Noah's Ark. In my opinion Capital Gains Tax (CGT) is just a marketing technique unless you are a dealer. How many silver coins as a private person do you need to sell in a financial calendar year to make enough profit to even have to pay CGT? and here in the UK, how is it monitored and enforced?

I personally would love to buy silver in the form of solid silver cutlery and silver cups and goblets as no matter how high or low silver spot gets, you can always use your silver to eat and drink.

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14 hours ago, juansanto7 said:

 

I personally would love to buy silver in the form of solid silver cutlery and silver cups and goblets as no matter how high or low silver spot gets, you can always use your silver to eat and drink.

My current stacking is solely sterling silver flatware, or any coins I can get under spot. (I got a Panama 20 Balboas coin - 129.59g of sterling silver from an antiques shop a few days ago for £70, priced well below spot). I'm finding regular amounts of silver cutlery well under spot, and I just love researching hallmarks, so I class it as a little hobby as well. However the spread for a fast sale is around 10-20%.

I also have a regular monthly fixed amount purchase for silver with Bullionvault. If you buy every month, then my storage and commission charges equate to a buy/sell spread of around 3.5-4% for an instant sale.  Which I'm very happy to work with. 

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Very sound judgement HighlandTiger, I too keep away from specials and pretty coins (proofs) as the market is rather fickle and subject to the whims of fashion. With the recent increase in the spot price of Silver my head is above water and would like to keep it that way. Although I may break my rule for the last QB.

When valuing my silver stack I always work on spot price and avoid factoring in what generic coins are being sold for, so a bog standard Britannia is worth £20.91 (as I type) no more and no less. The same with 2019 Dragon Bars and Queens Beasts.

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As always, it depends on what you buy and  the willingness to be a regular seller.

Anybody who bought the 2 oz Queens Beasts and has drip fed them out over the last few years will have made a very decent profit.

Buying proofs at issue price and hoping to make a profit is generally a bad idea. Buying proofs at low prices on the secondary market is a much better idea.

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On 12/09/2020 at 10:49, Shinus73 said:

Buying proofs at issue price and hoping to make a profit is generally a bad idea. Buying proofs at low prices on the secondary market is a much better idea.

I would agree with buying proofs from the secondary market. I don't trust anyone in the secondary market except a bona fide dealer. You can forget ebay.

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