Finance and Economics > Investing and Saving

Silver in 2018

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Hi all - Looking for updated / current feedback on adding Silver coins to portfolio in 2018! Lots of old posts, but the last time i can find a TSP episode is 2013... or is there an episode anybody remembers that discusses coins / strategy (that maybe isnt showing up in search)?

I have other areas mostly in order or some sort of strategy in progress and want to get started / have a strategy in this area. I am an MSB member, so am planning to buy using MSB discount from Sheaffer Select Coins & Collectibles.

Any resources or personal experience appreciated!

Several years ago, my wife and I started setting aside a monthly amount for precious metals. We just withdraw that amount in cash, put it in its own envelope in the safe, and head down to a local dealer every few months when we've accumulated enough to make it worth the trip.

Some notes:
It was easy to find a reputable local dealer by searching Google reviews.

When buying local,  you can pay cash,  which is completely anonymous if that's of any concern to you. It's also an opportunity to build a business relationship face to face,  which may come in handy if you are on the selling end one day.

We started out by just buying "miscellaneous silver", which sometimes goes for just pennies over spot, and you can get it in all kinds of interesting shapes and sizes that add some fun to your accumulation. Rounds, bars, and even dollar bill-shaped slabs can be had.  I have a few that were machined into popular ammo shapes, such as .308, .50bmg, 20mm.  Those were about $1.00 over spot and they're fun to show to select like-minded folks.

We broke away from misc silver for a while and started buying "junk" silver, or 90% pre-'64 coins for a while...

More later, got to head to work!

Jack had a bad experience with a friend he was doing some silver sales with and has not done many, if any, episodes on precious metals in quite I while I think.
I like buying precious metals from time to time, but I don’t really expect much from it.  I haven’t bought any for a year or so, but I liked 10oz silver bars and 1oz gold bars.  I don’t expect to need them because of runaway inflation, but they’re there if I need them.  I expect to pass it along to the adult children someday.

The Professor:
We do regularly invest in precious metals, but we tend to limit ourselves.  We consider it part of our overall "Life" strategy.

Interest in precious metals ebbs and wanes with the political situation at the time.  Back when Obama was in office, people were terrified of a financial collapse.  Now, that doesn't seem to be much of an issue, for whatever reason.  The Big Picture economic situation of the nation/world is still the same and the potential for an economic collapse, in my personal opinion, is only a tiny bit different than it was ten years ago.  However, with Trump in office, all those people who would normally echo such fears are mostly silent. . .Hope does a lot for some.

In our case, silver and gold offer us a few advantages.  The following are in no particular order:

1.  Hard Asset.  If you've ever tried to carry around $20,000.00 in cash, even in $100 bills, it's big and bulky.  It doesn't fit into your wallet.  Hell, even keeping $3,000 or $4000 in bills is a pain.  But, I can carry three or four Gold Eagles on my person and have anywhere from $3,500-$5,000 available with only a minor inconvenience of converting them and no one will notice.  I typically do this when I travel overseas.  I'll carry an American Eagle, a Canadian Maple Leaf, a British Sovereign and a Chinese Panda on me when I travel, in addition to the cash and cards I have in my pocket.  Most countries have coin or metals dealers who will buy them with only a slight pain-in-the-ass for converting (this is usually dependent upon the country in which you find yourself and the caliber of the individual with whom you're bargaining).  Many foreign banks will readily do transactions with recognizable state-issued gold and silver. If your hotel room is robbed or if you are strong-armed, a pair of well-hidden state-issue coins, once liquidated, can get you back on  your feet. . .at least well enough to get you transport to your local embassy where you can figure out how to get a temporary passport back home. The money will also give you enough for a replacement ticket if the airlines you're working with becomes a PITA about your stolen tix.  This is why I also have a Rolex. With my Submariner, I can go into almost any reputable jewelry shop and walk out with the equivalent of $4000 to $5000.

2.  Actual investment purposes.  Sensational claims of $20,000.00 per ounce of Gold or $2,000.00 per ounce of silver aside,   I have witnessed silver spike to over $40 per ounce twice, so far, in my lifetime.  Right now, I typically only buy gold if it's under $2k/ounce or silver if it's under $25/ounce per unit (i.e., coin dealers tack on an additional fee over spot price for the convenience of a state-issue coin, the above prices indicate what it takes for me to walk out of a dealer with such a coin).  If silver spikes, again, to $40+/ounce, I'll gladly scoop up all my silver and run to one, or more, of my dealers and liquidate.  I'll then take that money, set it aside in the safe and wait for silver to fall, again, to my "purchase" levels.  The last time I did this, I increased the amount of silver in my "portfolio" by 2.5X.  I sold X amount at $44 (IIRC) back in 2010,  waited a bit and started buying when it went back down below $20 in 2012 and finished up with recent purchases when it bottomed out under $16.  If/when it spikes, again, I'll do it all over.

3.  Precious metals are harder to spend than cash.  This, for me, is a Good Thing.  With our stocks and other investments, I need only make a phone call and I can have money in my checking/savings account in a day or two.  I have a problem with seeing things that catch my fancy (one such incident is what my wife refers to as the "Great HumVee Debacle of 2016."  Details are unnecessary, but suffice it to say that I almost had a military hummer in the garage as a dedicated BOV. . .all due to my. . .um. . problem.  It might have turned out differently if I had enough cash in the safe that I could have paid outright for it.  As it was, the relative inconvenience of liquidating an appropriate amount of precious metals was enough of a restraint that I came to my senses, with a little(?) bit of wife nagging to boot, before I pulled the proverbial trigger.

4.  Post-TEOTWAWKI barterability.  Truth be known: I'm still on the fence about this.  Many will say that silver and gold will be recognized as currency past such an event.  I have greatly mixed feelings about this, despite the comments to the contrary by many preppers/survivalists.  It is my belief that trust in precious metals has been propaganidized out of the general public.  Most younger than 40 know nothing of silver- or gold-backed currency.  In fact, we've seen dollar coins that are plated a gold color by our own mint.  The average person wouldn't recognize the significance of a St. Gaudens or even a Gold Eagle over a Sacagawea.  One of my daughters 20-something friends saw a 1914 Gold US Indian Head coin on my desk and actually asked me if it really were worth $10.  I wish I were kidding, but even after explaining the value of the gold in the coin, she didn't understand how it could be worth so much more if it only had $10 stamped on the reverse.  Silver would be similar, I fear, with $1 stamped on the rear. 

Add in pre-64 "junk silver" and I think there would have to be a whole lotta re-education that would have to be undertaken for a  post-TEOTWAWKI silver and gold barter system to be created/accepted.

Just some random thoughts.

The Professor

Thanks all for your feedback!! This is helpful stuff and good food for thought. I was looking at buying some small amounts from the MSB coin dealer, where we get a discount. Anybody ever used them? Seems like Jack vouches for them.


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