Should I buy Silver

[redbarn]

I am not rich by any means and would like to have an expert opinion.  I have 10,000 dollars I can invest and wonder if I buy silver bullion if it is a wise decision after reading all of the gloom and doom about the economy.  I have no real knowledge on investments and if the answer is yes, then how should I go about buying the silver.  Thank You

[snoblind]

I am not rich by any means and would like to have an expert opinion.  I have 10,000 dollars I can invest and wonder if I buy silver bullion if it is a wise decision after reading all of the gloom and doom about the economy.  I have no real knowledge on investments and if the answer is yes, then how should I go about buying the silver.  Thank You

Red, I'm hesitant to answer because I am not an expert by anyone's definition.  But I am in silver, both physical and paper (SLV) as well as some mining stocks.  Since you mention bullion I assume you are looking at physical accumulation.  My thought is that coins is the best way to go.

One of the questions you have to answer is how you will react to the volatility.  It is a roller coaster ride.  And while I think it's still early in the cycle, silver is/will be in a bubble.  So the second question is what is your exit strategy?  For me, silver is both  insurance and investment.

I will try to post some links this weekend.     

[redbarn]

Red, I'm hesitant to answer because I am not an expert by anyone's definition.  But I am in silver, both physical and paper (SLV) as well as some mining stocks.  Since you mention bullion I assume you are looking at physical accumulation.  My thought is that coins is the best way to go.

One of the questions you have to answer is how you will react to the volatility.  It is a roller coaster ride.  And while I think it's still early in the cycle, silver is/will be in a bubble.  So the second question is what is your exit strategy?  For me, silver is both  insurance and investment.

I will try to post some links this weekend.     

Thanks.  I'll be watching for them

[snoblind]

Here goes...

This is a free newsletter you can sign up for.  Ed basically recaps what happened the day before in the metals market.  I like the critical read section - you can find good articles not only on metals, but the economy. 
http://www.caseyresearch.com/gsd/home

This is the home of the true believers, Zero Hedge.  They await financial Armageddon with their stacks of silver, a year of supplies, etc.  But the staff links all kinds of stuff. Skim for silver related stuff and ignore the comments.
http://www.zerohedge.com/

Here's an on line place to buy metals and there is a forum to ask questions
https://www.kitcomm.com/

This is a link that Old Poop posted where you can compare on-line dealers
http://www.goldshark.com/

Not sure where you are located, Red, but local coin shops are the place to start.  Since metals are sold for the current spot plus a premium it pays to shop around.  What type of silver you buy will also determine the premium.  American Eagles usually are the highest, maple leafs next, then silver rounds & junk silver.  Junk silver is pre 1964 US coins with 90% silver.

I've got a couple of ebooks that I've gotten on Silver the past year.  Not sure if I can send them as an attachment on a PM, but let me know if your interested.  Since they are put out by folks who are either trying to sell you metal or a newletter, they put together a pretty good case for owning metal.

That will get you started.  When OP sees this thread I'm sure he will have some great links.


   

[HawgWild]

My thought is that coins is the best way to go.

sno - Just curious why you think coins are preferable to bullion? I heard this past week someone say that when bullion prices get this high they do just the opposite. I have a little of both and an opinion on neither.

TIA

[HawgWild]

redbarn - IMHO I think its a little late in the game to make an entry point into metals. You didn't say how old you are but I would open a ROTH IRA invest in a good dividend paying stock and DRIP the dividends. HIM posted a last of solid dividend paying stocks several months back. The price on some are pretty attractive right now.

Disclosure - I tried the metals back in the early 1980s and still holding. I'm still not where I'd be if I'd followed the advice I gave you.

Good luck.

[snoblind]

sno - Just curious why you think coins are preferable to bullion? I heard this past week someone say that when bullion prices get this high they do just the opposite. I have a little of both and an opinion on neither.

TIA

As I said in my intitial post my reason for holding silver is both investment and insurance.  For me, holding coins is mostly insurance.  If the "doom and gloom" folks are correct that the financial system will completely collapse then I think having easily verifiable silver in small, divisible amounts is a good idea.

If one simply wants to accumulate the most ounces with the lowest premium cost & most compact form then I agree bullion is probably the best way to go.

Red, I agree HW that it may be a little late to enter, but I just don't know.  But that may another argument for coins, in that one can systematically add to a position in smaller increments.

The one thing I WOULDN'T do is plunk the whole $10,000 down on one investment at one time. 

[snoblind]

redbarn - IMHO I think its a little late in the game to make an entry point into metals. You didn't say how old you are but I would open a ROTH IRA invest in a good dividend paying stock and DRIP the dividends. HIM posted a last of solid dividend paying stocks several months back. The price on some are pretty attractive right now.

Disclosure - I tried the metals back in the early 1980s and still holding. I'm still not where I'd be if I'd followed the advice I gave you.

Good luck.

I agree with this.  I mentioned exit strategy also.  One of the reasons I chose to use paper metal (GLD & SLV) in my IRA's instead of opening a "precious metals" is my exit strategy is exactly what you are suggesting.

[Silver Hog]

First, watch this video. It -should- answer your question.  It is 90 minutes long, but well worth it.

http://www.youtube.com/watch?v=tj2s6vzErqY

Buy bullion in chunks, don't go ALL in at one go. The squiggly line goes up, the squiggly line goes down.  I feel silver has a LOT of upside to it.  It is very volatile and manipulated at the moment so could have huge drops. It will go up huge, and drop huge. Be ready for the roller coaster.

Don't consider it an investment. Consider it a conversion of savings from paper to something you can hold.  Paper is losing value daily with inflation, silver goes up and down. More up than down lately. That wont go on forever, but is a good interim solution.

Buy Mike Maloney's book, it will be an eye opener.

[Silver Hog]

P.S.

Silver is silver, buy the cheapest you can, mix it up.   90% dollars, quarters, dimes, half-dollars.  Bullion rounds, bars. Don't go higher than 10oz bars  (too many 100oz fakes).  Get some coins, but not numismatics. When TSHTF, silver will sell for silver spot no matter how rare/shiny something is.

Buy from people you trust.

[Silver Hog]

one last thing to consider.

Silver is pretty heavy. If you buy it, be prepared to store it, hide it, protect it.

[Catfish Joe]

When it comes to investing I know absolutely zero. But I've been trying to do a lot of research the past year or so and everything I've read says Silver is still vastly undervalued. Even at $50.00 an Oz. With Gold at $1870ish an Oz. Silver should be at or around 116.88 an Oz. I began watching Silver back last November when it was at 24 and started to invest then and wish now that I really would have.

Do any of you guys that have been around the block a few times have any tips or pointers for someone wanting to break into the stock market?

[OldPoop]

Red, it's not too late to get into silver, but it definitely requires a much stronger stomach today than it did 10 years ago or even 2 years ago.   If you had bought in the $4-$6 dollar range or the $12 -$14 range you would not sweat the occasional 10- 25% drops in today's price.   Stewart Thomson says to take your gold and bury it under several feet of concrete so that it's way too much trouble to dig up, therefore saving you from yourself, preventing selling out in a panic after a huge drop.  For people like us that would be silver, not gold under the concrete.

Junk silver, pre 1964 coins, is perhaps the cheapest way to get started (compare prices) but it is bulky and heavy at today's prices, which could create storage problems.   While everyone would recognize the half dollar, quarter, and dime, I'm not so sure that the average person would understand the amount of silver contained in each one and what formula you would use to figure it out, which imo would negate any supposed advantage over 1 oz silver bullion coins or rounds.  These are stamped with 1 troy oz .99 pure silver, a value easily understood by Joe Sixpack just from checking the spot price for the day.

The American Silver Eagle is the most sought after silver coin and it is real money, $1 face value, made by the U.S. Mint with government approval (but the premium is a lot higher).   I'm not sure if this really makes them any better than plain rounds, but I do have some.  I did read about a guy bringing 9 Gold Buffaloes (another U.S. Mint product, 1 oz, $50 face value) across the border from Canada, and the customs agent counted it as only $450 being brought in rather than the actual $12,000 gold value at the time.  So there might be some advantages to having Eagles while we still have law and order and a normal functioning economy, but imo after the shtf 1 oz of silver will be 1oz of silver and that's all.  No one will care if it's a proof or a rare year or anything special. There are lots of places to buy silver, just do a search.  I like Golden Sate Mint for their low premium on Buffaloes, but they have a 100 oz min.
http://www.goldenstatemint.com/price-list.html

Some people say since you can't eat gold or silver it really has no value in a chaotic situation.  Well in that situation you can't eat fiat currency either, and it is worth less with each passing day until that time arrives.   Society can't exist without some system of exchange to purchase stuff you need.   So whether 1 oz of silver exchanges for $50 or $1,000,000 doesn't really matter, but imo you will always be able to exchange real money (gold and silver) for whatever fiat currency is being used.

If we do descend into a period of chaos, imo it would have to be temporary, because people desire civilization.   In that type of situation I think your priorities would be;
1.   water
2.   food
3.   shelter
4.   weapons for defense
5.   something of value to trade or sell afterwards (silver, gold, land, food, skills, etc.)

Some put weapons #1, just kill others and take what they have saved up, so let that be a warning to the wise.

[Dumb ole famrboy]

I disagree with Poop on the junk US silver coinage as they are manufactured to strict specifications as to weight, metal content, size, easily recognizable standard design making the amount of silver represented and authenticity easily determined. 3rd party silver bars and rounds are of no standard shape, size or design and markings provide little assurance as they are easily counterfeited. In a doomsday scenario I believe junk coinage would exchange more easily and closer to spot than other forms of silver such as bars, rounds and candlesticks.

[snoblind]

I disagree with Poop on the junk US silver coinage as they are manufactured to strict specifications as to weight, metal content, size, easily recognizable standard design making the amount of silver represented and authenticity easily determined. 3rd party silver bars and rounds are of no standard shape, size or design and markings provide little assurance as they are easily counterfeited. In a doomsday scenario I believe junk coinage would exchange more easily and closer to spot than other forms of silver such as bars, rounds and candlesticks.

That's what I was thinking... 

[Silver Hog]

There are basically 4 camps in the silver world.

1) The 90%-ers, like farmboy
2) The Mix it up-ers: The folks like me who buy anything as long as the price is right.
3) The purists, who only buy .999 bullion and ASE
4) the paper pushers, they only invest in paper silver (SLV etc).

Then mix in those that only shop online, only go to the coin shop, on buy on CL or eBay...

No right answer, it comes down to what you like. I can never tell when I go into the LCS (Local coin shop) just what I will be buying that day  These are mighty pretty and if I see some for cheap I get them.

[OldPoop]

I disagree with Poop on the junk US silver coinage as they are manufactured to strict specifications as to weight, metal content, size, easily recognizable standard design making the amount of silver represented and authenticity easily determined. 3rd party silver bars and rounds are of no standard shape, size or design and markings provide little assurance as they are easily counterfeited. In a doomsday scenario I believe junk coinage would exchange more easily and closer to spot than other forms of silver such as bars, rounds and candlesticks.

Perhaps.
Anything bigger than a 1oz round would be more profitable to counterfeit. 

The Eagle is made by the same U.S. Mint that stamped out the junk silver.  I don't think a half dollar or any other coin would be any more difficult to counterfeit than an Eagle.  Just the smaller the coin the less profit.  As silver keeps going up, smaller and smaller stuff will become profitable.

I'm not saying there is anything wrong with junk silver.  I have bought junk silver.  In a coin store or with a knowledeable silver collector junk silver would be an easy exchange.

IMO if I needed cash on a Sunday and I was to take 15 1963 silver dimes over to my neighbor and tell him silver is currently selling at $45 oz, so I will give him $1.50 in change in return for $40 cash he would probaly think I was trying to rob him.  If I took an American Eagle that says 1 oz silver .99 pure, and I explained that silver was $45 dollars, he would probably be more likely to give me $40 for it.

[OldPoop]

Catfish, I'm sort of like an Idiot Savant (except that I'm kind of weak on the Savant part too) in that all my investing knowledge is concentrated primarily in only one area PMs (gold/silver).  Just in the last few months I've tried to look a little at natgas and oil.

Healthcare is a big unknown to me.  I can see potential there, baby boomers are aging, but I see a lot to scare me too.   Anything the government is trying to manage is guaranteed to end up in a giant clusterf##k.  Even if ObamaCare is repealed, the government keeps cutting back it's payments yet expects hospitals to accept Medicare patients.   If a hospital turns away a person without any insurance they are in big trouble.  I see a lot of potential problems ahead.   I'm sure that a few insiders will find ways to get filthy rich, but I don't know how.

To me, green energy is still in the fad stage, but that may just be me showing my ignorance.   But unless someone immediately discovers an alternate cheap energy source that will meet all our needs, I don't see it replacing oil, natgas, nukes and coal in my lifetime.   I do believe it is the way of the future, but still in the future.   However, I did read that seaweed is 10x or 100x (don't remember) more efficient at making ethanol than the government run corn scam, and geothermal is supposed to be a cheap way to generate electricity.   So I'm sure if you search around you could make a profit.

I see no point in investing for the future in foreign currencies for poor or middle class folks.   Right now all currencies are fiat, so all will suffer the same fate, even the Swiss franc.  While you could make money today, to me it would be like playing catch with a lit stick of dynamite.   You don't want to be the one holding it when it finally blows up.

Oil is a limited resource, so no matter how many times the price comes down, you can be sure it will go back up because we are using it up.   If you act like a pro (and not like Elmer Fudd) and buy on the dips and sell some on the ups you almost have to make money.  It is safer to go with the biggies like BP, but if you are a risk taker look at MILL.   Natgas is also a limited resource but is currently in a glut so the price is a lot cheaper, but profit is farther away.  Read the Creating Wealth thread for natgas.   I've just run across a natgas royalty company that pays a dividend and is down, FRU (Freehold Royalties).

For silver and gold, imo silver is currently a better buy at around 43 to 1.   If you buy now, when the ratio drops to 30 to 1 or less start trading some silver for gold for safety.   If you don't have bullion in hand, you only have promises.  How much do you trust people that you don't personally know with total control of your life savings in a shtf situation?   With that said, gold stocks according to every "expert" that I have faith in are due to explode, if not this year then next year.  IMO they will pull silver stocks along too.   Royalty companies (SLW, SSL, RGLD) or baskets of stocks (GDX, GDXJ) are probably safer than individual companies until you learn more about what is going on.

If I was in my early 20s and knew what I know now, I would only invest in dividend paying stocks (after first burying some bullion for safety) and forget about hot tips for a quick payoff.  By using drips (reinvesting the dividend in more stock) you could easily be a multimillionaire by the time you're ready to retire.  Find a compounding interest table and study it, you will be amazed.    Big companies unlikely to go out of business in a depression are best;

Abbot Labs
Coke
Johnson and Johnson
Proctor and Gamble
McDonald's
Walmart
Altria
Intel

And with the future resurrection of natgas;
Encana
Fru
Niska Gas Storage
APU

Of course there are lots of others, just research.

[Catfish Joe]

Catfish, I'm sort of like an Idiot Savant (except that I'm kind of weak on the Savant part too) in that all my investing knowledge is concentrated primarily in only one area PMs (gold/silver).  Just in the last few months I've tried to look a little at natgas and oil.

Healthcare is a big unknown to me.  I can see potential there, baby boomers are aging, but I see a lot to scare me too.   Anything the government is trying to manage is guaranteed to end up in a giant clusterf##k.  Even if ObamaCare is repealed, the government keeps cutting back it's payments yet expects hospitals to accept Medicare patients.   If a hospital turns away a person without any insurance they are in big trouble.  I see a lot of potential problems ahead.   I'm sure that a few insiders will find ways to get filthy rich, but I don't know how.

To me, green energy is still in the fad stage, but that may just be me showing my ignorance.   But unless someone immediately discovers an alternate cheap energy source that will meet all our needs, I don't see it replacing oil, natgas, nukes and coal in my lifetime.   I do believe it is the way of the future, but still in the future.   However, I did read that seaweed is 10x or 100x (don't remember) more efficient at making ethanol than the government run corn scam, and geothermal is supposed to be a cheap way to generate electricity.   So I'm sure if you search around you could make a profit.

I see no point in investing for the future in foreign currencies for poor or middle class folks.   Right now all currencies are fiat, so all will suffer the same fate, even the Swiss franc.  While you could make money today, to me it would be like playing catch with a lit stick of dynamite.   You don't want to be the one holding it when it finally blows up.

Oil is a limited resource, so no matter how many times the price comes down, you can be sure it will go back up because we are using it up.   If you act like a pro (and not like Elmer Fudd) and buy on the dips and sell some on the ups you almost have to make money.  It is safer to go with the biggies like BP, but if you are a risk taker look at MILL.   Natgas is also a limited resource but is currently in a glut so the price is a lot cheaper, but profit is farther away.  Read the Creating Wealth thread for natgas.   I've just run across a natgas royalty company that pays a dividend and is down, FRU (Freehold Royalties).

For silver and gold, imo silver is currently a better buy at around 43 to 1.   If you buy now, when the ratio drops to 30 to 1 or less start trading some silver for gold for safety.   If you don't have bullion in hand, you only have promises.  How much do you trust people that you don't personally know with total control of your life savings in a shtf situation?   With that said, gold stocks according to every "expert" that I have faith in are due to explode, if not this year then next year.  IMO they will pull silver stocks along too.   Royalty companies (SLW, SSL, RGLD) or baskets of stocks (GDX, GDXJ) are probably safer than individual companies until you learn more about what is going on.

If I was in my early 20s and knew what I know now, I would only invest in dividend paying stocks (after first burying some bullion for safety) and forget about hot tips for a quick payoff.  By using drips (reinvesting the dividend in more stock) you could easily be a multimillionaire by the time you're ready to retire.  Find a compounding interest table and study it, you will be amazed.    Big companies unlikely to go out of business in a depression are best;

Abbot Labs
Coke
Johnson and Johnson
Proctor and Gamble
McDonald's
Walmart
Altria
Intel

And with the future resurrection of natgas;
Encana
Fru
Niska Gas Storage
APU

Of course there are lots of others, just research.

Wow thanks for the advice. All of that makes a lot of sense. My biggest problem so far its processing all the info. Its a bit overwhelming at times.

[bgsisco]

To piggyback on the compounding interest point, just use the rule of 72.

Divide 72 by the rate of return and that is how long it takes to double your money.

Example:   $100,000 with an 8% avg annual return

72/8=9 yrs. So in 9 years $100k would be $200k and 9 more years $200k would be $400k. Adds up fast.

[Silver Hog]

Encanca is on sale these days, under 24.

Catfish, patience is the biggest key to success. Overwhelming now, but take your time (it your money at risk!).  Pull the trigger on few small purchases until you feel comfortable with the trading platform or system you decide to use.

Don't jump on a stupid fad like Crocs shoes and lose it. (umm guilty).  The banksters will eat your lunch and laugh about it to your face.

[snoblind]

Geez, I'm glad I didn't say hock everything you own, scrape together every penny you have, and go buy every ounce you can on Monday.

It's a good example of the roller coaster...

[OldPoop]

Geez, I'm glad I didn't say hock everything you own, scrape together every penny you have, and go buy every ounce you can on Monday.

It's a good example of the roller coaster...

We are experiencing another small gift, a small sale on silver.

[Catfish Joe]

Encanca is on sale these days, under 24.

Catfish, patience is the biggest key to success. Overwhelming now, but take your time (it your money at risk!).  Pull the trigger on few small purchases until you feel comfortable with the trading platform or system you decide to use.

Don't jump on a stupid fad like Crocs shoes and lose it. (umm guilty).  The banksters will eat your lunch and laugh about it to your face.

Thanks, I'm still watching for now. Just trying to get a better understanding before I jump in.

[OldPoop]

This is from Bob Chapman of The International Forecaster.  If you have 10+ min to spare and want to understand some of the reasons why gold/silver is still an okay buy, this is well worth the time.

Some excerpts;

Once the dominoes begin to fall the options and derivatives will fall and fail as well and that will bring the whole house of cards down. A great deterioration of debt is taking place worldwide, and continues to be delayed by the creation of money and credit from central banks. Confidence is definitely declining in policies of different countries and their debt accumulation.

In the US we see the Fed for the past three years lending money to the banks at zero interest rates and then allowing the banks to lend back to the Fed at higher rates, establishing guaranteed profit with no risk and in turn depriving borrowers of loans. Can you imagine the inflation when these funds become monetized?

Wow!  That's what I call a beautiful scam!  Banksters create money out of thin air, loan it to themselves and their cohorts at 0 interest, then borrow it right back and pay interest on it with money taken out of our pockets.  Also there's still that pesky $16 trillion they created out of thin air and secretly gave to themselves.  So far there have not been any announced plans of how it will ever be paid back.  But evidently none of the above is actually a problem since no one in our government seems to be concerned about it.  I guess there's probably not much of a future for a politician that goes against his masters.

IMO if that doesn't make even the most naive holdout realize that we are all Elmer Fudds and are the food source for the banksters (and have been for generations), then there is no chance of survival for that person. 

Inflation will start accelerating shortly. This is a way for the Fed, who we believe is orchestrating this, to in stealth get QE 3 underway.

If banks start lending to small and median sized businesses unemployment would not increase and there could be a recovery accompanied by much higher inflation. If that does not work we can expect a major war to bail the elitists out. That in finality would end the American dream.


We called QE 2 and stimulus 2, as well as QE 3 a year ago May. The Fed has not said anything about the $16.1 trillion they lent out, nor why none of it has been paid back. What about the $1.2 trillion that we ladled out to Wall Street and banking? It could be that QE 3 if announced in September could counter a falling stock market, at least temporarily. The timing could be perfect if even by accident. Then again, all markets and currencies are under pressure versus silver and gold. We could see gold shortly at $2,000 to $2,200 with silver at $60 to $70. By March gold could be $3,000 to $3,200 and silver $100.00. This may seem implausible to you, but we have been correct 98% of the time for 22-1/2 years.


http://theinternationalforecaster.com/International_Forecaster_Weekly/Fearing_An_Even_Worse_Inflationary_Depression_Ahead