How much silver to hold

[stefffana]

15 minutes ago, kimchi said:

Some great posts on here and this is just one snippet from many.

I have some semi-numismatic (even some faddish coins, some of which I regret a bit) and when silver first spiked their premium was initially largely retained. I believed that it was time to sell them all and buy bullion instead, but alas circumstances didn't allow me to.

Now there seems to be a 'squeeze' where the some of the premium coins (many of the more popular ones especially) are not even approaching the premiums they should be over basic bullion (I fully understand why). So I'm just sitting tight and hoping for a repeat that I will be able to take advantage of. It may well not come again, but I'm lucky in that almost all premium coins I bought are offset by tubes at less than £15 a coin (my best deal being £12.50 posted from Europe to England, and then by a friend on to me). Pretty much at current prices (and I don't expect significant pullbacks in future) all my premium coins are covered cost-wise.

So, although I could be sitting on more, I'm very thankful. Again I'm not saying it'll repeat but even the coins and bars I bought in the UK with VAT before I found the Silver Forum are looking cheap now.

You are a lucky example, even could be better theoretically, because you have started your stack long time ago. For you already worked hard the spot price advantage to keep strong your investment, keeping your average price per oz at a low level.

But I am thinking about a lot of new stackers who started this game at the end of 2020, when the boom happened. They started buying at £28-35 per oz and they need long time from now to wait until it is possible a decent profit.

[kimchi]

38 minutes ago, stefffana said:

You are a lucky example, even could be better theoretically, because you have started your stack long time ago. For you already worked hard the spot price advantage to keep strong your investment, keeping your average price per oz at a low level.

But I am thinking about a lot of new stackers who started this game at the end of 2020, when the boom happened. They started buying at £28-35 per oz and they need long time from now to wait until it is possible a decent profit.

I started in 2017. I should have done a lot better because 'buy gold and silver' came to me as a moment of 'inspiration' in 2016. I can't look at the prices in that time I waited before starting, it's painful!

Yes, absolutely, I understand your thinking/intent I would buy basic cheapest bullion right now (from trusted sellers on here, no ebay), or nicer coins at a very small premium. For now in the UK anything that is CGT free (although if there's a dramatic shift in price I suspect they'll stop that).

Imvho £28 an ounce (hopefully of course you'll be able to get it cheaper - and looking at the trade section on here you can, just stick with well-established traders and still check your silver, anyone can make a mistake) will be a good investment (or at the very least a store of some of your wealth) in the medium/long-term.

Edited April 11, 2021 by kimchi

[stefffana]

2 minutes ago, kimchi said:

I started in 2017. I should have done a lot better because 'buy gold and silver' came to me as a moment of 'inspiration' in 2016. I can't look at the prices in that time I waited before starting, it's painful!

Yes, absolutely, I understand your thinking/intent I would buy basic cheapest bullion right now (from trusted sellers on here, no ebay), or nicer coins at a very small premium. For now in the UK anything that is CGT free (although if there's a dramatic shift in price I suspect they'll stop that).

Imvho £28 an ounce (hopefully of course you'll be able to get it cheaper) will be a good investment in the medium/long-term.

I don't know... Old british currency pre 47 is CGT free, or not? Should be in my opinion.😊

[stackerp5]

On 11/04/2021 at 16:03, stefffana said:

I don't know... Old british currency pre 47 is CGT free, or not? Should be in my opinion.😊

Unfortunately not. Only legal tender is CGT free.

Edited May 1, 2021 by stackerp5
correction

[stefffana]

4 minutes ago, stackerp5 said:

Yes, ALL British currency are CGT free. Any UK currency even if not currently used in circulation.

Thank you! 🤗 It is a great information for me!

[HerefordBullyun]

Once you Stack! - YOU NEVER GO BACK!

[Nowhereman]

On 11/04/2021 at 10:46, stefffana said:

Hi, @Bigmarc,

I believe the real potential of silver is in spot price, not in premium. So, now I am stacking only low premium silver, very easy to sell near spot price (1000g,  500g bars, old british currency, and scrap ). I sold already all high premium coins and I've converted all in sovereigns and another silver low premium.

Why? Because in next future the industrial demand will generate a rise in spot price and my stack's value will increase and I will do profit only waiting. The shiny silver coins ( now at spot + 60-95% ) will lose from their high premium when the spot price will be high. The market demand will be for cheap silver, not for expensive coins. 

I can't understand why people are interested to pay now for a silver 1oz coin £28 - £35, equivalent at £18.42 spot price + 52% to +95% premium, when the same metal can be bought easy at 0 to 30% premium in a different shape. I am not talking about numismatic or collectible products. This is another story, I don't know this game, I am talking only about pure stacking.

About quantity... Depends on your style of life, your age, your plan of retirement, depends on what you want to give to next generation. But a minimum one is around 15kg silver and equal value in low premium gold in your stack.

This is my opinion, I am not a guru in PM, but I prefer to stay safe, speculating only the spot price and ignoring high premium products. 

 

Let's imagine a scenario, using today's spot price £18.42/oz silver and a future potential spot price x2.5 = £46.05/oz silver.

 

John bought today from a dealer 1 kg bar, paying £790.62, VAT and shipping included. This is £24.58/oz, +34% premium.

Jane bought today 32oz (app.1 kg) silver Royal Arms and she paid £1129, VAT and shipping included. This is £35.28/oz, +91.5 premium.

After few years, the spot price is £46.05/oz = £1480.7/kg and it is time to sell. 

John will sell quick 5% over spot, having in hand £1554.7. His pure profit is £764/kg.

Jane will struggle to sell at 30% over spot, but because the spot is so high, she will accept finally only 10% over spot, having in hand £1628.7. Her pure profit is only £499/kg.

It is a difference of £265/kg between John and Jane. If the stack is 15kg, the difference is £3975.

 

But let's talk about Bob. He bought today 1kg scrap silver at spot price. He paid £592. He sold his silver in the same day as John and Jane at spot price, having in hand £1480.7. His pure profit is £888.5.

Position in this game:

1. Bob:   £888.5 profit/kg;

2. John: £764 profit/kg;

3. Jane: £499 profit/kg.

 

This is rough, because in reality, Bob was able to buy more scrap than John and Jane, using the same money.

If we are talking about the same money invested, the difference is huge.

 

Let's compare now only Bob and Jane, to be more visible this difference.

Jane paid £1129/kg for Royal Arms and Bob used the same money, buying 1.9kg scrap silver.

Jane is selling after years at £1628.7 with profit £499.

Bob is selling after years at £2813.3 with profit £1684, with a difference between them of £1185.

If the stack is 15kg, the difference of profit between Bob and Jane is £17775.

 

This is the reason I am trusting in spot price, not in premiums.

I hope my explanation was clear enough for all new stackers. I know, it is difficult to see the real potential of scrap. But from scrap to treasure it is only a little step.😊 When you will see here scrap silver at spot price, do not hesitate and buy quick!😁

Happy stacking, guys, happy stacking!

Stefan.

 

 

 

Very well put but what about CGT on the bars and junk silver. I have a good mix of coins, bars and most of the coins are British and CGT free. Every purchase I have made I accept the immediate loss due to VAT on the silver and premiums as I intend to hold long term and will wait for a more realistic and time inflated spot price. Inflation is just eating in to my cash savings after all.

 I dont have much junk though and you make a solid argument for it. Do you have any hints or tips of where to get good deals for decent pieces. What to go for and what to avoid?

[stefffana]

7 hours ago, Nowhereman said:

Very well put but what about CGT on the bars and junk silver. I have a good mix of coins, bars and most of the coins are British and CGT free. Every purchase I have made I accept the immediate loss due to VAT on the silver and premiums as I intend to hold long term and will wait for a more realistic and time inflated spot price. Inflation is just eating in to my cash savings after all.

 I dont have much junk though and you make a solid argument for it. Do you have any hints or tips of where to get good deals for decent pieces. What to go for and what to avoid?

Hi, @Nowhereman,

CGT is important only if you need to sell quick a big quantity to a dealer. If you are selling on private market your bars and junk, probably will be ok, but I can't be 100% sure, I have not enough knowledge about this topic.

About scrap and junk silver now. It is still plenty on ebay and sometimes on here, or another public auctions.

If you are interested to buy, go first for old british coins, because are very easy to buy and sell them and are very safe (there are not fake coins due to their small value). A correct price to buy them is -5% to +5% spot price, depending of quantity and quality, pre20 or pre47. But even +5% is better than VAT + premium.

When you are buying scrap sterling silver, avoid foreign or unclear hallmarks, weighted vases and handled knives. Also, try to avoid a too good to be true deal, as a treasure discovered in grandfather's shed or house clearance, but with unclear pictures. Usual they are scammers and you will lose money.

Good luck and happy stacking!🤗

Stefan.

[Nowhereman]

1 hour ago, stefffana said:

Hi, @Nowhereman,

CGT is important only if you need to sell quick a big quantity to a dealer. If you are selling on private market your bars and junk, probably will be ok, but I can't be 100% sure, I have not enough knowledge about this topic.

About scrap and junk silver now. It is still plenty on ebay and sometimes on here, or another public auctions.

If you are interested to buy, go first for old british coins, because are very easy to buy and sell them and are very safe (there are not fake coins due to their small value). A correct price to buy them is -5% to +5% spot price, depending of quantity and quality, pre20 or pre47. But even +5% is better than VAT + premium.

When you are buying scrap sterling silver, avoid foreign or unclear hallmarks, weighted vases and handled knives. Also, try to avoid a too good to be true deal, as a treasure discovered in grandfather's shed or house clearance, but with unclear pictures. Usual they are scammers and you will lose money.

Good luck and happy stacking!🤗

Stefan.

Cheers for the advice,  I try and avoid Ebay , buying secondhand stuff for brand new money. It's too easy to get sucked in to the mentality of winning at any cost. Also I'm a bit wary of fakes when it comes to PM's. I might dip my toe and promise not to bid the bargains out of existence for the sake of serotonin.