Silver and gold are wise additions to your portfolio. Old timers tell us not to put “all our eggs into one basket.” They advise us to diversify and not to “count our chickens before they hatch.”
There is generally no disagreement that precious metals should be a part of your portfolio, however, there is a wide range of opinion on how much your portfolio should consist of and of what form.
One analyst/adviser may recommend 10% while another may urge 80% or even higher. In fact there are those who say that your portfolio should consist entirely of gold and/or silver.
“How much precious metals should be included in your portfolio?” is an important question but is beyond the scope of this article.
Today I am writing to warn prospective precious metals buyers about problems inherent in the market as well as to briefly cover the forms of precious metals people buy.
Popular Forms of Precious Metals
- >> “Junk silver” 90% silver US coins
- >> Silver coins from the US and other mints
- >> Bars
- >>>> Ingots manufactured by private companies
- >> Rounds
- >>>> Novelty “coins” usually 1 troy ounce and manufactured by private companies
Not everyone agrees upon which form of precious metal to obtain. Whichever way you decide I would highly recommend that you go for actual physical metal. My own opinion is that “junk silver” is the best way to go. However, there are a lot of silver coins which have collectable value over and above the metal content. For example, some years on the American Silver Eagles bring much higher prices than others.
Buying silver, gold and other precious metals at a fair price can be tricky. Unfortunately the average person doesn’t fare too well and they wind up paying huge premiums over and above the metal value.
Companies (especially television advertisers) are selling gold and charging exorbitant premiums above the coin’s value. In the case of silver coins and specialty “rounds” one can easily pay more than double the intrinsic value. Such coins may turn a profit one day only if they are relatively rare and hence have collectible value in addition to the metal. But if you are looking to invest in metals you must take care to pay as little a premium as possible, or none.
If you want to buy silver or other precious metals as an investment don’t be tricked by the ads on television. Study and research and avoid those high premiums! One way to get silver very near the spot value is to buy old circulated coins. If you are careful and you shop around you can find rolls of common dated US 90% silver coins for just a few dollars above spot. That would be an unacceptable premium to pay on a single coin but not bad at all for an entire roll.
You make a wise decision when you decide to buy gold or silver. Don’t turn that choice into a mistake by over paying. There are a lot of sellers in the market who have big bucks for ad campaigns. These people are making their fortunes by selling precious metals at a huge mark up. I don’t want to “advertise” for sellers in this context but I will say that if you do just a bit if research you can find precious metals at very near to spot value prices.
Don’t jump at the first shiny thing you see. Beware of those big spender advertisers, such as those who sponsor the “news” shows designed to scare you into investing in precious metals. Investing in precious metals is a sound notion but these folks take advantage of buyers who don’t know any better.
An interesting side note – These days copper is being sold as a precious metal! You can buy bars, ingots, and even rounds of pure copper and they are very often sold for many times over the actual copper value. One of the best ways to invest in copper would be to gather pre-1982 US pennies.
- Pre 1982 Copper Pennies Selling at Premium Prices
- Valuable Copper Pennies and Zinc Errors
- Save Those Copper Pennies
This has been written by a man who is not attempting to sell either silver or gold. But if you heed my advice you can absolutely save yourself a big chunk of money on your gold and silver acquisitions.
Copyright 2013 David Slone all rights reserved.