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 Replies: 24 / Views: 2,650 |
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Pillar of the Community
United States
3592 Posts |
Just remember when you gamble, there is a chance you will lose. And that's all the PM game is...gambling.
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Pillar of the Community
United States
2335 Posts |
Here's a few things about buying PM's that many people overlook.
In general, you pay a premium over spot when you buy & get slightly less than spot when selling. That puts you behind right from the start.
Prices for a dealer's stock don't always follow spot prices. If there is a large drop the dealer can/will increase the premium over spot to avoid a loss. When things smooth out premiums drop.
In most cases the "numismatic premium" is not a real hedge against a price drop in the PM price. The vast majority of the price for common date coins is the underlying value of the PM, a premium of $100 over spot is just 6% when the PM is $1600. If the PM dropped 50% to $800 you would still have a loss of 47%.
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Pillar of the Community
United States
667 Posts |
The first problem that you have is checking the price everyday. The second problem is that if you are going to buy numismatic coins then buy then high grade and slabbed. I may get hammered but so be it, numismatic does not necessarily mean a better investment in gold or silver. My advice buy the gold with money you do not need today, let it sit and watch the price. When you are ready to sell then shop the buyer, that means going to who will give you the best price. Most times these will be individual buyers who will be willing to pay closer to the spot price and possible factor in some gain for a non graded numismatic coin. APMEX does a great job, however there are others that may do as good or better. Personally I would not consider this - $20 St. Gaudens Gold Double Eagle in AU or better condition - a good numismatic coin. There are just too many of then available. |
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Pillar of the Community
 United States
5865 Posts |
You guys are making me cry...  |
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Pillar of the Community
1028 Posts |
You didn't do that badly. First off, gold can still rise back up much higher and you could sell your coin for a profit from the original purchase price. Secondly, Although I agree your particular coin is not a great numismatic piece, it should do better than bullion if gold drops way down.
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Pillar of the Community
Canada
3692 Posts |
Gambling? I've never had a lottery ticket that was still worth something after it lost. The price drops but you still have the metal. Where's the loss?
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Pillar of the Community
United States
1450 Posts |
Don't panic,you haven't lost anything until you sell!I bought my gold at $600/oz.,saw it double,then drop back to near what I bought it for,then to $1900 ,then down to $1570 ,then back to the present. The point is,I have not gained or lost anything because I haven't sold any yet. Relax,monitor prices and don't sell on panic,sell when your head and gut tell you to,then don't look back!
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Pillar of the Community
United States
5865 Posts |
Well, fortunately, I'm not actually planning on selling this coin. It's strictly for my collection. But I told my wife that I was buying it as an investment, and keeps asking how much it has gone up in value now that gold has started to rise again...
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Pillar of the Community
United States
4008 Posts |
Quote:
And that's all the PM game is...gambling. Gee... that makes it sort of sound like... life? No guarantees in life save death and taxes. Those ARE guaranteed! Everything else is in the "maybe" category. As to buying PMs... we all have our reasons for doing that or not doing that. Those reasons are pretty much all we need to do or not do it. We sometimes seek confirmation of our choices, though, and that is a good part of why we read and post messages here and elsewhere on this subject. IMHO, buying PMs is a good general idea if you enjoy it and can afford it. The long term trend in the dollar is for it to become cheaper. It's done that for the 50+ years that I have been watching it and I see no reason for that to change any time soon. Given that, gold and silver make pretty good hedges against inflation. One final thought for Barry. If gold were to rise to $5,000 an oz. over the next 5-6 years, would you still be worried about the premium you paid when you bought it?  |
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Pillar of the Community
United States
3670 Posts |
I almost Joe'd my pants when I saw you got that piece for $120 bucks, before instantly realizing it was a typo, lol.... The only good thing I see for buying from a big dawg that size, is you are getting a real product, minus a fake slipping thought he cracks which is always possible.... I would rather go into the mom an pop one of a kind dying breed store and spend my dying dollars, than go to Wal-mart and add to the machine/monopoly, but that is just me.... Funny thing is, I still find myself  in Wal-mart, and wanna smack myself anytime I buy anything from there.... Edited by Silverhawk74
10/15/2011 01:49 am
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Rest in Peace
United States
9104 Posts |
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But I assumed (and we all know what that means) that the value of the coin would rise and fall along with the value of gold. OK, now we've established where you made the mistake, let's look a little deeper before blaming APMEX. You bought a coin that is priced on demand by coin collectors, and wonder why it doesn't follow the price of bullion gold. My svdb doesn't rise and fall with the copper market, they're two different customer bases. If you wanted to invest in bullion, they make a coin that looks a lot like yours and tends to rise and fall with the bullion price. Other than that, there's no particular reason your Saint can't fall in value to the bullion value of its content. If that's the worst mistake you ever make investing in something you're not familiar with, you'll be fine. Ride it back up as the premium changes, or buy more and dollar cost average. |
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Rest in Peace
United States
9104 Posts |
PS-
I think you meant $1820, not $120, on your original post. You can edit it with the pencil icon at top of the post.
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Rest in Peace
United States
9104 Posts |
Quote:
I was willing to pay the $220 premium for the coin because I felt that buying numismatic gold would hedge against a loss in value if the price of gold fell dramatically. I've dealt in gold and coins for 40+ years, and I can tell you that Saints are not "numismatic gold". Yes, before 1975, they carried a premium because US citizens were allowed to own them and not bars, but a similar premium was carried by similar coins: Mex 50 peso, 100 c/korona, sovereigns, etc. When a sizable quantity were dumped by yurrupeans, I saw them drop from $65 to $50 in a matter of days. That's over 20%, or equivalent to $360+ on your coin. People don't "collect" Saints, and you have to have collectors to have a numismatic premium. |
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Pillar of the Community
United States
5865 Posts |
Fixed the typo in the original post, thank you.
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Pillar of the Community
United States
667 Posts |
Never get frustrated that gold will look great each and every time you hold it in your hands. There is something magical holding it no matter what the value is on a given day.
Being older makes it that much special.
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Replies: 24 / Views: 2,650 |
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First Page
Posted 10/14/2011 2:50 pm
