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crystal329

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Posts: 5
Reply with quote  #1 
There are many different types of gold and silver to consider buying as an investment. Coins are struck by many different countries and come in lots of different designs too. Which way should I go?

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igillman

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Posts: 19
Reply with quote  #2 
The short answer is "it depends". Everybody has their own reasons why they do what they do so all I can do is outline some pros and cons and some reasoning and then you can decide.

Overall Goal.
What is your overall goal? If it is a quick profit then find something else as physical gold and silver is not going to turn around and make you money overnight. If you are going to buy now and not sell for more than 5 years then keep reading.

What are we doing?
We are going to be buying bits of metal now and selling them later. This involves two competing goals. The first one is the purchase of as much metal for as little money as possible which would suggest large generic bars. The second is the sale of items to people we do not know who run coin shops which would suggest smaller weight items that are easily identifiable as being genuine. Buying several 1000 oz bars is the way to get the most metal for your money. However when trying to sell the metal at the other end you have to sell the whole thing and the buyer has to be certain that it is genuine and not silver plated tin or zinc. Buying higher premium 1 oz coins will get you less metal but when it comes time to sell it you will find that it is easier to confirm that it is the genuine item due to the coins being made to exacting standards.
Another issue is that a big bar may be worth more than the potential buyer can come up with and may negate the sale. Smaller items have a larger market due to their affordability. However smaller items have a larger premium. It is all a balancing act.

Gold or Silver?
Silver takes up 70 times more space than gold but due to each ounce being worth less than gold it may be easier to sell in the end. Also, smaller gold items have larger premiums than the same value of silver. If you are spending thousands at a time then gold might be a better idea due to storage space. If you only have a few hundred to spend each time then silver would be a better choice.

If you want some suggestions to start with then get some 1oz silver coins from your country of residence or whatever is popular where you are. In the USA get some American Silver Eagles and some Maple Leafs. Then buy a few bars/rounds to get some variety in the stack. Always have the thought "can I sell this later if the price goes up by 10 times" in the back of your mind when you buy something.

Get used to calculating the premium on an item (percentage above spot price) to get an idea of if an item is worth it or not. Always know the current spot price when buying something just to make sure that you know if it is a good deal or not.

Buy from reputable dealers and if it looks too good to be true then it definitely is. eBay is only for the highly trained with a very good eye who does not mind buying a dud every so often.

...and finally, if you want something because it looks good then get it and forget the rules. You are not only out to make money you are also out to have fun and to own something that not many other people have.
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igillman

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Posts: 19
Reply with quote  #3 
One other thing to think of when buying is that it will probably all go for spot price in the end anyway so the extra you pay for "slabbed coins" or "limited editions" is most likely not worth it. Stick close to spot if you can and do not get sucked into "special editions" or "limited mintage".

Above all have fun :-)

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