investing in precious metals

[destillat]

It's been a lonnngggg time since I've been here, but I find there are some pretty smart people out here, so I thought I'd try to pick some brains...

I am VERY new to investing so I'm looking at options.
How do you guys feel about investing in gold/silver?
I'm not in a position to invest HUGE amounts of money. Basically a couple of hundred dollars a month (outside of my standard savings/RSPs/mutual funds).
I was looking at gold/silver not only as 'another basket' to invest in, but also to have something of value in my hands if the apocalypse comes!

What do you clever investors think about gold/silver?
Aaaand, have any of you had any experience with silvergoldbull.com??

Thanks for any advice you may have.

 

[LordLoki]

about gold/silver?

Silver/gold are great investments. BUT may not be for you.

The people who sell PMs to the public do so in various forms. from 1/4 oz 'coins' all the way up to bars. The problem is the minting/handling/shipping costs on the lower value products is extremely high.

If/when you decide to buy, get the current price of the metal, and figure out what you are paying by the same unit (example per ounce). If you are paying more than a few percentages extra for yours, what are you really buying?

We gave mini bars of silver to our bridal party last year as part of their wedding presents. (Except for the best man they were my kids and grandson). It will take several years before those mini bars increase enough to cover the cost of minting etc. I gave my wife a pair of real bars and they had 0% mark up so they began increasing in value the next day.

Advice: put your money in an account until you have enough to buy a bar. Do not get suckered into minted.

 

[blaze69]

Wouldn't buying gold at its current rate be a horrible mistake?

 

[richaceg]

right now, silver is going up in a rapid pace compared to gold (very slow). This were once 'safe havens' for investors. With our current state, there are NO safe havens anymore. ETFs I'm investing my $$$ on dividend stocks. Market is slowly going north, Might as well bring some extras on the side on my way up.

 

[oil&gas]

Wouldn't buying gold at its current rate be a horrible mistake?

That I am not sure. But, depending on your time horizon,
investing in the Euro and the USD toilet paper would likely
turn out to be an even more horrible mistake. I would exchange
my Euros into Norweigian Krone. The USD is destined to depreciate
to its intrinsic value--zero.

A *little* exposure to precious metals is fine. Investing in hard assets
like rental properties and infrastructures that can generate stable and
sustainable income stream is IMO the key to safeguard your future
financial security.

 

[anon1]

I'm investing in booze and whores.

How is that investing when they are classified as necessities?

 

[fun-guy]

I'm investing in booze and whores.

I'd like to know the ROI on those, perhaps I should do more research.

 

[LordLoki]

Just to put it in perspective, as of today:

1 oz Maple Leaf Silver coin = $39.17

100 oz silver Bar = $3716.53

for gold look at

https://www.scotiamocatta-estore.sc...log.aspx?nst=NV1kjP8qYlJDHloDB4vS/H2oZSJg46qV

If you are going to buy, just go to a Scotia bank and they will get it for you.

but unless you can invest in a 100 Oz bar, remember you are spending 5 to 10% on minting and handling etc. No true value.

Advice, save up till you get enough to buy a bar.

 

[Clear History]

How is that investing when they are classified as necessities?

The proper term is "consumer staple" (as apposed to "consumer discretionary")

 

[destillat]

Thanks for all the advice.
From what I see gold is out of my financial range right now.
So, speaking silver, it looks like today it's at $34.14 per ounce.
The Scotia website (and this seems common with some others I looked at) is selling 10oz at $377.44 and 100oz at $3748.78. That's obviously with added handling fees.
Is that standard 'cost of doing business' for precious metals, or are there other avenues of buying that are closer to actual cost per ounce?

 

[AJstar]

Thanks for all the advice.
From what I see gold is out of my financial range right now.
So, speaking silver, it looks like today it's at $34.14 per ounce.
The Scotia website (and this seems common with some others I looked at) is selling 10oz at $377.44 and 100oz at $3748.78. That's obviously with added handling fees.
Is that standard 'cost of doing business' for precious metals, or are there other avenues of buying that are closer to actual cost per ounce?

Express gold refiners on Victoria ave are very competative. Will beat the banks every time.

 

[LordLoki]

Is that standard 'cost of doing business' for precious metals, or are there other avenues of buying that are closer to actual cost per ounce?

yes, no, sort of. If you are buying 5 to 10 bars at one shot there are better options. The problem is being certain that the it is 99.999% silver. The two most common tricks is to sell you 18 carats gold, is not in the same league as 99.999%. Another trick is to sell 99% silver. I have even seen silver plate sold to the uninformed. Standard old con is a few mm of fine silver with a core of lesser silver alloy. If you buy from a "great deal place" it might just be melted down jewellery.

To use the hobby world, there are a few well reviewed and very honest providers (mainly Scotia Bank), and a bunch of craiglist offerings. I would advise sampling of the silver (drill through it at a few spots) and getting it assayed. But the cost of that is about equal to the savings in small purchases.

You mentioned disaster currency..... If the currency system collapses, and I have a loaf of bread, you have a silver coin....... guess what the price of a loaf of bread will be? Foolish investment. Silver is not magic

 

[destillat]

You mentioned disaster currency..... If the currency system collapses, and I have a loaf of bread, you have a silver coin....... guess what the price of a loaf of bread will be? Foolish investment. Silver is not magic

I get your point, but don't you think silver will be of more value that some Canadian $20 bills, or a piece of paper that says I had $50,000 in a bank account?

 

[LordLoki]

I get your point, but don't you think silver will be of more value that some Canadian $20 bills, or a piece of paper that says I had $50,000 in a bank account?

It did 100 years ago. Problem is the modern government wisdom is to freeze precious metal trading in the even of any major disaster. On the street, why would anyone trust that the shiny thing you are trying to spend is real silver? PMs have an edge if you are concerned about devaluing the dollar. a year after it happens, you can exchange your gold/silver for a reasonable amount in 'new dollars'.

We have several example of governments freezing all transactions and announcing 'effective now, you must trade in your old currency for a new one. Effective x days from now the old currency will no longer be accepted'. Those who had 'things' were better off than those with huge bank accounts. Silver and gold are 'things'. But they had a terrible time getting any value from them for several months.

So.... If you can afford to buy gold or silver bars from a reputable source. My rule of thumb is ~ 1/3 of your investments. Minted silver/gold should be looked at only for its silver/gold content. If you are concerned about devaluation, do your homework and see how it was done already. There are several great ways to insulate yourself from the impact. If you find them do not tell people. If the government thinks enough people are using them, they will plug the holes.

 

[roblestone]

To get the most bang for your buck invest in gold miners like Junior Gold Miners etf...GDXJ

 

[39ajaxmale]

I get your point, but don't you think silver will be of more value that some Canadian $20 bills, or a piece of paper that says I had $50,000 in a bank account?

If that's the case, you should be investing in guns, the guy with the most silver isn't the winner, the guy with the biggest calibre is.

If you're honestly thinking of investing for the 'apocolypse' I assume you mean a total financial collapse, as opposed to doomsday. Canada is VERY well protected against such a collapse, but in case we all go to 'greece' (and I'm not talking about in an SP way) gold and silver become useless metal. You might as well invest in steel, iron, copper. The value gold and silver hold currently is the value they have to the buyers who are using them in manufacturing, production, building, microchips, etc.. and the buying that central banks are now doing to try stabilize their economies, and provide security for their currencies. Outside of that, precious metals are not 'currency' by any grasp of the imagination.

My suggestion, first since you are "VERY new to investing" and "I'm looking at options." is to avoid gold/silver at all costs. If you want to learn the precious metals game, invest in copper, watch how the trials and tribulations of China's interest rates move your commodity.

I would hazard a guess that if you found a decent financial advisor they would talk to you about risk, investment timeline, and exactly how much money you have available to invest. Given what you have already said earlier, no advisor in their right mind would suggest gold to you. If you ABSOLUTELY want to get in the game, because I do feel that speculative prices on gold will be up in the next year, 2 years, 5 years... get into miners and ETF's. I'm not so bullish on silver.

If you want some good resources on gold, I read a lot of insight from Martin Murenbeeld, who is the chief economist for Dundee Wealth, and widely respected as one of the leading gold 'guru's' right now. Google him.

 

[maryjohnosn]

what a wonderful and informative post, thanks for sharing this..
todays gold rate

 

[Big Sleazy]

ETF's are fine if they're actually backed by physical. But most of them are frauds.

If you're going to buy in small volume on a monthly basis find a dealer and speak with him and get to know him. Tell him what your plan is and go from there.

Here are a few sites to get you started.

http://www.silverdoctors.com/

http://sgtreport.com/

http://harveyorgan.blogspot.ca/

BS

 

[alex52]

Going into gold and silver never made sense to me, not with my RRSP money. Might as well go to the local casino and lose your money there.
I am sure there are few shrewd speculators who have years of experience in this field who may make money in this form of speculation.

 

[Big Sleazy]

Going into gold and silver never made sense to me, not with my RRSP money. Might as well go to the local casino and lose your money there.
I am sure there are few shrewd speculators who have years of experience in this field who may make money in this form of speculation.

I've never understood this thinking. Gold and Silver have been money for 5000 years. How can money be risky ??? It's probably the most conservative investment you could make. And with the Federal Reserve printing money it's the best performing asset classes over the last ten years. How mush was a 1964 dime worth in 1964 ? A dime. How mush is it worth today ? Over $6.00. Why ? Because of the silver content. Back in 1964 you could probably buy a bag of chips and a coke. What's a dime buy you today ? All Gold and Silver are is a reflection of the money supply.

Go calculate what % gain you have made in the last ten years in your RRSP. Then calculate the real inflation rate. And by the way. The CPI numbers the Government puts out are bullshit. They even say so on there web site. It says these numbers " do not include food and energy ". Who needs food and energy ??? Why would I want to calculate food and energy in the inflation numbers ?????

My point is that 10 years ago the Dow was at 10000. What's it today ? Then go back and look at Gold and Silver over the same 10 year period.

It's a no brainer. Buy physical. Stay away from the ETF's unless you know for sure they are backed by physical gold and Silver. I know the Sprott Fund and the Central Fund of Canada are legit. I personally prefer to spread the risk around. I use a vaulting service and I hide my metals.

BS