How do you buy silver?
Real Estate Investor · Frisco, TX, TX · Member since 2010 · 388 posts · 138 votes
On another thread there has been some discussion on buying silver. Since I have been wanting to buy but am unsure I thought I would start a different thread for that. Here is my question. I go online to a site like:
http://www.providentmetals.com/bullion/silver/private-slv/100-ozt-bar.html
There are so many different types/brands of silver bars, how do I know which one to buy? or would you not rather buy bars but something different?
This is one of your better sites to buy gold and silver:
They show the spreads between buy and sell, they sell all denominations of coins with the 1/10 ounce American Gold Eagle being the most popular.
Good Luck
I'll put this thread over 100..... :)
My GF just showed me a pic on her phone of some jewelry she wants (her collection and investment thing).
101 rings. Mostly gold, dinner rings/diamonds mounted...a few are those really gaudy types with rows of small stones. Silver rings and tourquise and other stones.
For sale by an individual and her boyfriend who want pennies on the dollar it appears. MY GF is all excited!
So, as many of you might guess, I'm suspicious.
The story goes that the woman was married to a wealthy guy she divorced and they are hers. Her boyfriend seems to be the sales guy and obviously doesn'y know much, but the price. They are new to the area from Chicago area and both have a job here.
Here's the clincher, they are all displayed except for one ring laying there, in a jewelry display board, 10x10 slots as you see in stores.
I've been around women who had jewelry and they had all kinds of jewelry boxes, bags and what have you, but never saw someone who kept rings on a commercial style display board.
So, I'm wondering if any pawn shops got ripped off??????
Like I said, it's a great price for all, that just adds to the possibility of fencing goods in my mind. While my GF wants to keep most, she thinks she can sell about 20-25 individually and pay for all of them.....probably so, but I see the cops knocking on the door after she lists a few of them..... :)
I'm having a hard time expressing these concerns.
I guess if I asked for the seller's ID and copy the info, if they were hot they would refuse to show ID, but I'd also have to prove they sold them, so a bill of sale and matching signature to the ID.
I have not done bulk purchases before like this so I suppose that would be sufficient. If the sellers got nervous or refused, I'd walk!
SO, when you buy, besides testing what you buy, what due diligence do you go through in case you get some hot jewelry?
Ali Samana - I've not read in detail all the replies here so forgive me if I rehash something.
The biggest question to you is WHY do you want to invest in PM?
There are more or less two basic reasons - 1) To cash in on volatility of silver or gold and 2) A hedge against inflation\preservation of wealth.
If you are looking for quick gains and are slanted towards stock trading then paper silver or gold is the way to do it. There are problems with this IMO. First off, to make any significant gains you have to be able to purchase A LOT of shares....A LOT. Secondly, I believe the paper market (i know I'll probably get pounced on here) is heavily manipulated by MASSIVE players who are trying to keep the PM prices down in order to gain on constant short positions, and also to keep the dollar looking stable. This actually IMO creates a market that is unstable and hard to understand from a technical perspective. Thirdly, investing in the paper market only means you are investing in promises to deliver. At some point because of number 2, the paper market is going to implode and the small players will be left holding the bag and not the metal.
If you want to hedge against inflation\preserve wealth - Then IMO purchasing physical bullion or junk 90% silver coinage is the way to go. This is problematic in ways as well. While you don't deal with the risks of the paper market, except for the price fluctuation, you do need to keep abreast of what's driving the price in order to be ready to exit PM in order to move your wealth into the next asset\commodity bull market\ bubble. Physical storage can be an issue, but I believe this to be a minor issue. I believe the biggest issues around storage is keeping it close, safe, and inconspicuous. Also you have to consider the liquidity of what you purchase. Paper money *is* liquid, precious metal is less liquid than paper money. So you have to constantly plan and be ready for liquidation if you need to access the wealth you've stored in precious metal. Dealers like Apmex (I personally use goldsivler.com) usually have a buy back schedule for their customers. This allows you to have some ease and convenience in the plan to liquidate, but you have to remember ease and convenience come with a price.
Which physical PM is better (gold vs silver) - There are some technicals to this, but to keep it simple the most important IMO are these: First off the Silver\Gold ratio. Right now it's hovering around 50:1. This means it takes about 50 ounces of silver to purchase an ounce of gold. This means silver has great up side potential as far as performance as an asset goes. In the early 80's, when the last PM bubble popped, the ratio hit 100:1. Secondly, industry has found more and more uses for silver. Its used in everything from toothpaste, to solar panels, to cell phones, to antibacterial products. There are literally infinite uses for silver. Gold on the other hand has no real use as a consumable in industry, so most gold that is mined get's purchased and then sits in vaults. This has lead to silver being in more demand with dwindling supplies. Related to this is that silver is price in-elastic, meaning industrial use hasn't s shown any signs of decreasing demand while price has gone up, in fact demand has increased. Lastly, to me silver is more affordable. If you make regular purchases of silver, (buying on a dollar-cost averaging basis, you can, over time, build up a nice savings that will preserve wealth far better than a savings account at a bank.
All this doesn't even cover the biggest reasons to invest in PM as a wealth preserver. The US monetary system went off the gold standard almost 45 years ago. The more money that is printed means that the price of gold an silver will continue to rise and the more likely a fiat currency will fail\collapse\reset. At some point, *EVERY* fiat currency has failed and gold and silver owners have been the winners in every currency collapse\reset. Remember the MASSIVE players in the paper market I mentioned above. Some of those players are governments including the US government and the Federal Reserve. I'm not preaching gloom and doom here, but our dollar has lost %95 of its purchasing power since 1913 (the creation of the current Fed Res system) and if you are a believer in history repeating itself, then at some point (i believe very near future) the dollar is going to have to at least go through some *reset* because of being decoupled from a gold standard and too much printing. I for one want my savings in tangible assets and not worthless paper.
The best book I've read on investing in precious metal has been Mike Maloney's Guide to investing in hasing power precious metals.
Hope this helps and sorry for being so wordy.