New silver investor any advice welcome.

[Luoganta]

Hello everyone,


I am about as new as they come to not only silver but investing in general and was lead to this site by a friend. So I'm getting the lingo here pretty quick and some of the articles posted on these boards are very informative. However, if any would be so kind to give a few words on the best way for a young person with not the deepest of pockets to get started in silver I'd be all ears.


Thanks in advance for your time.

[highroller4321]

Welcome to the forum and into investing. It is always best to make your own decisions but have knowledge is good.

Since you are just getting started I would go with the lowest premium items. Silver is sold at spot + X You want the X to be as low as possible. 100oz bars are normally the lowest premium but personally I avoid them because there are a decent amount of fakes out there. I would either go with 90% coins or 1 or 10oz bars. For now I would also avoid silver eagles and maples because they do carry a premium.

If you don't have a chunk (small or large) that you are looking to get started with than I would just do dollar cost averaging. This means that you put X amount aside per month or week and buy no matter what the price is. This will allow you to hit the low and high points as well as be getting into silver on a regular basis.

Just my 2 cents on what I suggest.

Feel free to ask lots of questions and remeber we all started out now knowing anything so no question is a dumb question.

[Luoganta]

Thanks for the quick input highroller, you and I have the same idea with the 90% coins.

One of the biggest questions I have is where to do my trading. I'll clearly have eyes on the offers here on the site, ebay, and local dealers. I've even had the apmex website show to me but like you said about premiums, the prices there seem to be a bit higher then coinflation.com(another website i was told is good for starting up). I have what little I am investing ready to go but I don't know where to go with it.

[highroller4321]

I would suggest going to your local coin dealer or starting on here. If you buy from a retail site like apmex, bulliondirect, gainsville, ect you are going to pay more because they are retail. Smaller coin dealers and just looking for quick flips and people on here are selling for whatever reason.

Go to apmex and look at their buy and sell price. Have those numbers in your head and than go into the local dealer and ask how much his/her 90% is. Compare that number to ampex numbers and if its reasonable pull the trigger. If not walk away and find a better deal.

[whatsnext]

Buy the lowest premium for sure, but if you get good looking coins(morgans, peace, ASEs) at a dollar or 2 premium go for it.

Stay away from stuff thats scratched and dinged up bad, it is harder to sell in person. People are superficial and they like illusions better than true value. Especially when its shiny.

I'd buy 1oz ingots over rounds, but 10 oz bars are nice to hold.

[zyll]

I look at the buy/sell spread when deciding what form of silver to purchase. For instance, at my local coin shop, 40% silver halves sell for spot, but buy is S - $3.69, a 10.24% spread at today's price. Likewise, for ASE's the sell is S + $3.69 and buy is Spot; a 10.52% spread. I bought ASE's when the spread was a LOT lower, so I stand to make more on them when I sell...they will always command a premium, just because they're beloved.

90% junk is a 9.66% spread, and may sell at a discount when the refiners are backlogged by the upcoming supply squeeze. I really only own them for potential barter uses in a post-dollar economy.

Generic 1oz. .999 rounds have a 6.64% spread, and 100oz. bars have the lowest spread at 6.50% but are the least fungible and not a good choice for me. 10oz bars have a 6.77% spread, and yes are nice to hold. So I usually get rounds or 10oz bars as the most bang for my buck.

[drofdrugs]

Just bought 4 dollars face of 90% for less than 130 at my local shop! It's easily my favorite way to buy.

[97guns]

for a young person with not the deepest of pockets to get started.

i also agree with going to your local dealer and buying 90% pure US coinage

[Luoganta]

Thanks for the tips guys/gals!

I now have a price point to go off of, an idea of what form of silver to get my hands on, and how much I want to spend in total.

One last question - on apmex I don't see prices for coin rolls listed - the "apmex buy" buy price. I can see it listed for bars and a few other mediums but not rolls. Whats up with that?

[highroller4321]

Thanks for the tips guys/gals!

I now have a price point to go off of, an idea of what form of silver to get my hands on, and how much I want to spend in total.

One last question - on apmex I don't see prices for coin rolls listed - the "apmex buy" buy price. I can see it listed for bars and a few other mediums but not rolls. Whats up with that?

I think they have a minimum total buy price. They don't want to mess with transactions of just 1 roll at a time, I dont think anyway.

If you called and talked to them I am sure they would give you a price.

[DeanStockwell]

I'd advise you do not buy into the hype of going only with physical. The BEST way to get low premium silver is paper, and you have the option of using leverage(key since you mentioned you are low on capital). Though use caution when investing long term with leveraged funds, as compounding can have a negative affect on returns.
The government will NOT confiscate your paper silver, and neither will the fund you invest in. It is easy to become distrustful based on opinions read on the internet but I'd advise to go with mining companies or funds which track the spot price of silver. Mining companies give you the opportunity to invest in a company which earns a profit and pays a dividend instead of a single commodity, and the prices of the miners are correlated with silver prices. Look at companies like Silver Wheaton(SLW). Many members invest in mining companies.
SLV-1x, non leveraged(spot goes up 5%, this goes up roughly 5%)
AGQ-2x, leveraged.(spot goes up 5%, this goes up roughly 10%, and vice versa.)

If you don't trust paper silver, then the cheapest way to invest in silver would be 90% and 40% junk silver.
I'd also wait to buy any silver. We will soon enter a correction(price decline) which should present an opportunity to buy.
Send me a PM if you need any help understanding Realcent/investing lingo.
And let me put on my flame suit before posting.

[AGgressive Metal]

Never buy anything that is "mills" - its an Ebay scam where they sell base metal covered in a micro layer of silver.

[OtusLotus]

I personally like the 1-oz bars, and typically buy them every week...

I will usually buy 2 or 3 or 4, but set my limit at around $150...so not to get too much at any one time..

I usually go for the bars with the pictures on them and recently acquired a New York bar with the Statue of Liberty, Santa Claus, car, train, and a picture of a Morgan..

There is a lot of options for you, just wherever you go...KNOW BEFORE YOU GO!

The best advice I can give you is that if you understand what the spot price is, you can always calculate whether that is a good price or not...

In the end, it is not only an investment in a precious metal, but something that you can look at and admire for years to come!

[Luoganta]

I have another question for the wise and helpful.

Spot, Bid, and Ask.

I believe I understand the terms and what they mean but I do not understand how they relate to each other. I understand that *BID* is what people want to pay for something - while *ASK* is what people want to sell it for. I do not however understand how spot fits into the two, or how to determine spot given those two values.

Thanks dean for the bit on paper vs physical I've heard a lot of talk about physical and it was nice to read a counter argument. You too, AGgressive Metal, I've had my eye on Ebay for a few days and I'll be sure to stay away from those.

OtusLotus - I'm just a tad nervous about getting into bars of any size. I just have that natural comfort from coins, with bars it's just a wide eyed "o man it's a bar of silver" moment. What can I say - I've only ever seen gold/silver bars in movies.

[barrytrot]

Spot is the current bullion metal. You can see that at http://www.kitco.com/
And you can see spot converted to coin value at http://coinflation.com

In other words, "spot" is what the world markets have decided that an ounce of the metal is currently worth.

Bid and Ask are DEALER RATES. That's why there is a spread, fyi. Don't be upset if you buy above "bid" or sell below "ask". Use the "bid" and "ask" for estimates of what you should be close to. But remember if you are paying "bid" then someone is selling at "bid" as well and vice versa.

[zyll]

ONLY BUY PHYSICAL SILVER AND KEEP IT IN YOUR POSSESSION. Don’t get suckered into SLV, custodian accounts, E-Silver, mining stocks, precious metal IRAs, or any other instrument that does not have your wealth in your absolute control. You have to understand why you are buying silver. It is to have a real tangible wealth in your control while the fiat paper wealth world burns. I could think of nothing more maddening than get this far, to see the potential of silver and then be caught in the wrong form of it. And don’t think that you are going to somehow trade this like stocks. One day this will all end. The world will rush for the fire exits and you will not make it out alive. I have always told my wife that it is better to be years early to this party than one day too late.

I have two simple rules on storing your stash; don’t keep it in your house and don’t keep it in a bank. Anywhere else in the world is fine. Having a bullion stash is like having nuclear waste. You have to control it but you don’t want to keep it in your house. You do not want to bring physical danger to your family. Here is a recent home invasion of a family who lost $750,000 of silver. Thankfully no one was killed.
http://www.cbc.ca/news/canada/british-columbia/story/2011/02/16/bc-silver-theft.html

[Mossy]

http://www.cbc.ca/news/canada/british-columbia/story/2011/02/16/bc-silver-theft.html

"Wolbeck said investigators don't know why the victim was collecting silver bars."

Oh, gee. He cannot understand why someone wanted to hold silver. Wow. Such a difficult question. (snort)

Sounds like inside knowledge. Never let anyone know you are holding, or where. If someone catches on, complain about the cost of a safe deposit box.

How long before the kidnapping industry (Mexico) moves up to the US or Canada and starts "processing" gringoes?

[Luoganta]

Just thought I'd let everyone here know I found a very local shop that sells all kinda of things from old photos of celebs to silver coins! Got 10 war Nickels for 1 buck a pop however, I saw something very interesting...just loads of silver spoons. I'll be looking into talking down the dealer from his $4 per mercury dime price tomorrow. Thank You realcent'ers!


Anyone have any experience in silver spoons/forks?

[zyll]

Well, I've thought about getting some silverware, because it's hard to eat soup with a silver coin. Seriously though, the antimicrobial properties of silver has me intrigued about eating with silver utensils. Make sure if you buy, that they're stamped "sterling" or ".925" on them.
At Thanksgiving as a kid, I noticed that the tarnish on them leaves a funny taste. Use baking soda to clean them, not silver polish.

[Luoganta]

I was thinking more along the lines of snatching the silverware for the silver value. Although it would be a fun experience to eat a bowl of cereal with a silver spoon I don't think I would ever truly believe the spoon was clean no matter how many times it was washed lol.

I guess the thing going through my mind when I saw them was "how do I know they are real"(thanks to the above post i'll be looking for stamps) and "how do i know how much silver is in them" I don't think the dealer would like it if i asked him to put each one on a scale and cherry picked the good ones.

[Mossy]

Regarding "Physical vs Paper", how optimistic are you?

This is the same, IMO, as "Bullion vs Numismatic". The first of each pair if you are a pessimist, the second if you are an optimist. If all goes well, then you can lose money on physical and bullion, and make a bunch on paper and numismatic.

[zyll]

I was thinking more along the lines of snatching the silverware for the silver value. Although it would be a fun experience to eat a bowl of cereal with a silver spoon I don't think I would ever truly believe the spoon was clean no matter how many times it was washed lol.

I guess the thing going through my mind when I saw them was "how do I know they are real"(thanks to the above post i'll be looking for stamps) and "how do i know how much silver is in them" I don't think the dealer would like it if i asked him to put each one on a scale and cherry picked the good ones.

I see. Was the dealer offering a fixed price for each spoon? Or was it [total mass in grams] x [purity (sterling = 0.925)] x [0.0321507466 troy oz. / gram] x [price of silver per ounce]?
For example, if you saw a sterling silver spoon weighing 16 grams, given silver at $35/oz. the melt value is around $16.65.

The long way of determining if "it's real" is to test the specific gravity. Not something you can really do in the shop.

[Luoganta]

Yea there are all mostly fixed prices. The majority of them are tagged as sterling or silver plated(eeew) some are as low as $25.

I can easily just use the formula you posted and do the math on how much money there is to be made considering shipping/processing to a refiner, but the problem I'm running into is no weights are listed on the tags. Even worse it's a consignment shop so the kids behind the counter just give you the *I dont know face* when you ask a question about an item.

[Coppercrazy]

You scored on the war nickels cause thats way under spot.If youre comfortable with the spot price right now,see what it is for a merc on coinflation and offer to buy a few at spot.You never know,the dealer might just take the cash.Your shop sounds interesting,but definately seek out a coinshop. Theyre all different for sure,but my guy always has awesome coin AT spot,and especially with these prices that are the highest seen in years.Coin shops handle coin and bullion in volume,where as an antique type shop does not and will usually ask a premium,unless they havent changed theyre old prices! Good Luck!

[Luoganta]

Yea I tried to pick them up a few hours ago but this guy was just stone walled at $4 per coin. After about 3-4 min I gave up and snagged 2 194* dimes @ about 2.3 per coin. Which tells me he isn't really selling the silver as much as he is selling the coin. I think I'll go back in about a month and see if he'll come down.