I like gold sovereigns. They are fractional (.2354 oz) and can be found for low premiums back to the 1880's or so. They were made in England, Australia, and South Africa, with a variety of mint marks and portraits.
I buy a mix of everything ,love the pre 33 US gold and I like purchasing the first coins in new series as you can get them near spot and over time have the chance to appreciate over bullion. I purchased the first three Queens beasts and if you check them out at APMEX they have appreciated quite well. I also purchased some 1 oz palladium rounds that If it goes much higher I might flip into something not sure what yet.
Either I don't understand the term "Stack" or the video is way off.
My understanding of the word "Stack" in this context is to purchase and store physical gold for investment purposes. Without getting into the relative merits of gold vs. other investment instruments (most would agree that it is a low performing investment), if your intent is investment then you need the highest quality product at the lowest cost.
Remember buy low/sell high.
Quite simply, that means the largest sized bar from a reputable mint/with appropriate proof of authenticity that you can afford. At the very least, 1 ounce bars. Moving to coins you will end up with a purchase premium that you won't recover during a sale. When you go to fractions of an ounce, the premium increases.
Go to a bullion dealer and look at the price of fractional gold. Today in USD, a reliable online dealer has 1 oz Eagles for $1554. 2x 1/2oz Eagles are $1582, 4x 1/4oz Eagles are $1636. Clearly the cheapest way to buy a gold eagle is by the ounce.
Between the options... again. Eagles are $1554, Buffaloes are $1559 Gold Maples are $1542, Britannias are $1534... The Buffalo, Britannia and Maple are 4x9s or 99.99%). The eagles are 22k or 91.67% but do contain an ounce of gold alloyed with copper... this is the same as the UK Sovereign. You can get a brand name gold bar for $1526. (BTW, all of these prices are for 1 oz... There are further discounts with higher volumes). Were I in the market today for a 1 oz gold coin to stack with the above data, I would buy the Britannia.
This is all based on a Market price of $1494 for an ounce of gold.
In most cases, you will get market or slightly less on selling gold so you need to purchase at the highest volume and cheapest unit price you can afford to get closest to the market price or in other words... minimize the spread between buy and sell.
The minute you go for a numismatic coin from circulation such as a pre-33 eagle, you start getting grading involved and numismatic premiums... That is a different type of investing than stacking. It is speculating on a future value of a specific item in a specific quality... In that a pre-33 Gold Double Eagle is little different than a Carson City Morgan... It is rarity, grade and eye appeal that will determine what the value is and any intrinsic value from gold or silver only establishes a lowest price. In bullion transactions, grade rarely matters as long as the coin or bar is free from obvious damage or abuse. The biggest risk/challenge is often confirming your item is not counterfeit. (Another disadvantage of PM investing vs. stock market or bond investing).
All gold and precious metal stacking is predicated on the presumption that under certain circumstances, the PM will appreciate vs. the country's currency and you can recover your initial investment. While this does happen from time to time, generally speaking an index fund against one of the main stock markets will out perform PMs unless you get very selective in your time windows.
The key here is to remember why you are purchasing the gold or silver... If you like a specific coin (& I am loving the Queen's Beasts series) then the price is less important as you are a collector. If you are an investor (stacker), you want the most of a given PM you can buy for a given $ amount and the format is unimportant as long as you can have proof of authenticity. (A RCM or PAMP bar with proof of authenticity will always return more per ounce than a hand poured bar by a hobbyist smelter)
Lots of good points, vonigohcr. Americans have the luxury of buying Sovereigns and Eagles (and other alloyed gold coins)...something we Canadians unfortunately do not, in a practical sense. If I were to buy a gold Eagle today from SGB, I'd pay $249.50 in taxes here in BC.
Quote: If you like a specific coin (& I am loving the Queen's Beasts series)
Me too, I've been grabbing all the coins up until now, and I'm thankful for that! APMEX has sold 23 of the 1oz gold Dragons on ebay @ CAD $2875 a piece, a couple of the 1 oz gold Griffins at $3282 per coin, and a Lion at $2875. Sheer insanity.
At the coin shop I work at, we usually recommend 1oz Gold Eagles or Buffalos. We always recommend that people buy the larger coins since the premiums are lower. If you are looking for gold with the lowest premium, 1oz bars are a good way to go.
Quote: Americans have the luxury of buying Sovereigns and Eagles (and other alloyed gold coins)...something we Canadians unfortunately do not
Why is this? Does Canadian law not consider alloyed gold as an "investment"? Just asking. I'm not very familiar with Canadian laws on the subject.
Quote: Does Canadian law not consider alloyed gold as an "investment"
In order for bullion to be considered investment grade and thus not subject to tax, it needs to be 99.5% pure for gold & platinum and 99.9% for Silver. So sovereigns, krugerrands, gold eagles are all taxable... Sort of kills any investment potential. Federally assessed sales tax (GST) is 5%. Note that NCLT that meets the purity standards is not charged GST.
Where I live in BC, it is even worse... even if the purity standards are met, if you pay a premium over the base metal value, then the entire purchase is taxable for provincial tax as it is considered a collectible and not an investment. So when you buy that Australian Swan... or any NCLT from the RCM ... it is subject to Provincial tax at an additional 7%.
Quote: Where I live in BC, it is even worse... even if the purity standards are met, if you pay a premium over the base metal value, then the entire purchase is taxable for provincial tax as it is considered a collectible and not an investment. So when you buy that Australian Swan... or any NCLT from the RCM ... it is subject to Provincial tax at an additional 7%.
Who is demanding that tax? That's borderline fraudulent in my opinion. I bought both the gold and silver Swans and they were tax-free as they meet the requirements for bullion.
@1cent. Unfortunately it is in the text of the Provincial exemptions guidelines extracted from the law
Quote: PST exemption exists for: Gold, silver or platinum in bullion or coin form, unless obtained for a purchase price greater than the market value of its gold, silver or platinum content (e.g. collector's coins)
This means that a bullion coin that is sold for a value in excess of the market value of the PM (assuming an allowance for the dealer's margin etc.) will be deemed a collector's coin and subject to Provincial tax. If you look at coins such as historical Chinese Pandas, Silver Kiwis, Australian Swans etc... they sell for a premium well above bullion and could easily be deemed as collector's coins... if all you wanted was a bullion investment, why wouldn't you go for the cheapest Maple Leaf or Bar in the weight you choose... by opting for a coin with a premium attached, you are believed to be filling a collection (or so the logic goes).
It could be argued (and I would certainly argue) that it's aimed at true collector coins. Yes, Pandas and the like do command more of a premium than basic bullion rounds, but I've never paid provincial tax on them and I never will. Typical BC extortion though, brought to you by the same criminals who are legally allowed to collect between 12% and 20% PST on private used car sales, even though the general provincial rate is 7%.