Starting Out And Silver Is Cheap, Jump In?

I have a pretty small amount of money in pms but I will give you my rather simple opinion based on my experience. Kitco and APMEX are two sites I like for info and purchases. Keep an eye out for APMEX specials they sometimes do very low premiums on bullion coins.

I stay away from bars, I know they have a lower premium per oz but I have heard can be harder to unload, probably more an issue when talking gold but I like 1 oz rounds.

As for when to invest I prefer to do it on a regular basis regardless of current price, I base this practice on dollar cost averaging because I plan to keep this investment for a while.

I know there are much more sophisticated investers on this site who are sure to chime in and I am looking forward to their input.

Is silver cheap? I think that's a matter of perspective....if you are looking short term I still think there is a bit more it may go down....

One thing I am liking a lot more every day is the GSR....if that hits 80 I WILL be selling all my gold for silver.

Now there are some things I would ask of you before I dole out too much advice...
Why are you now interested in silver?
What purpose does is serve you to buy silver?
What kind of time frame do you think you would be "into" silver?

Perhaps starting with that information I may be better to help answer any of your questions..

Mintyfresh: I would like to comment a few things you said. First of all, paying for college or a car is not a rainy day type of thing. You probably need a car to get to your job, and if you are going into a job the you will need a college education, then those are things that must be budgeted for not can not be viewed as rainy day expenses.
The reason I say this is because you should never put money that you will need in the short term (say like next ten years), into something that will have you locked up. Taking silver as you example, yes the markets have been all over the place the last couple of years. But look at the markets for a couple of decades and you sill see they stay relatively flat. Yes there was a big run on silver with the economic uncertainty, there was also a big run on silver back in the 80's. Not that I know the future, but if you buy bunch of silver today, it goes down to under ten dollars and doesn't shoot up again for another thirty years, are you going to want to sell at a loss for college or a car?
Many members have said this before, but you should make sure you are maxing out the matching of your retirement fund first (in the US we have 401k plans and the like, I am not sure what the equivalent is in Canada), before you are buying silver.
If the individual on the youtube channel that you were watching happened to be in at the right time, and then sold at the right time, chances are that they did make a lot of money. Plenty of other people have lost money on silver. I would browse back and look at some of the threads. On of the threads is called "What did you add to your stash today?" Start at the beginning and then see how many of the early posters are sill members of the forum.
You say your main focus is getting in while it is cheap. Don't rush things as they are likely to get cheaper and will probably stay cheaper for quite some time. It is better to get to know the market. I would recommend building up more slowly over time, using only money the is discretionary. Also, you do not want to have all your assets in silver. Several people have stated before on the forum you don't want more than 10% of your assets in precious metals.

Don't disagree with anything here really.

Silver is cheap relative to gold with the ratio being 74 - 75 ounces of silver being equal to one ounce of gold. Historically that is very favorable for silver relative to gold. Does that mean it is favorable relative to cash or stocks? No comment, you figure that one out for yourself.


While precious metals should be built into a portfolio at some point, generally they shouldn't be someone's first investment. Not saying that this is yours, just saying for discussion sake. If someone is the type of person that has difficulty saving at all, where that $300 is spent on smokes, women, fast food, and other discretionary stuff, then buying $300 of silver makes a ton of sense to me. It isn't as easy to sell or spend as cash so it is like forced savings. Best part, you get the satisfaction of going out and spending your savings too.

For people with no savings / no savings willpower, I think a healthy coin addiction is a great habit.


As for what to buy, check out your local scene and check out ebay and some of the big online dealers like JM Bullion, APMEX, Provident Metals, etc. Note that the forum software will automatically link some of these as I didn't link them either.

I have found what works best for me is to be open minded in what I collect and establish a good relationship with the better of 2 LCS in my town.

Being open minded allows me to purchase low premium coins that I love. Lots of variety too. Maybe someday I will specialize, but at this point I am just getting back into coin collecting after a 30 year break.

The good relationship is great for both price and learning. Leave a little money on the table, don't hammer down your dealer with ebay comps like some two bit realtor. Don't get taken advantage of either, know the market price and you will be respected more and you may end up getting some great knowledge out of the guy. Always make clear that you want them to quote you the price out the door, with all taxes included. Nothing worse than agreeing to a price and then picking out your coins and then having him slap on 6.75% sales tax and having to put back some coins for lack of funds. You pay cash, he quotes you out the door pricing. That is how it works. Taxes are his problem when you are buying.

I would know your numbers too. Buying one ounce coins makes it simple, but sometimes there is great stuff to be had in old US coins, in particular old US gold coins, but the silver too. I update and print this out when I go to the LCS, it helps me evaluate premiums on the fly and gives me somewhere to take any notes on pricing if needed. Hopefully this link works.

https://docs.google.com/spreadsheet...?usp=sharing

That link is current for right now. It shows you the math on 90% silver, 40% silver, and old US gold coins which were 90% gold and 10% silver and have oddball weights.

Knowing what you are paying per ounce for these makes it easy to compare to bullion prices and make an informed decision with your limited coin budget.

If you just want the metal, the 40% is often less than melt out the door at my LCS. The 90% gold coins from the late 1800's and early 1900's often have a lower premium on them than generic bullion or gold eagles, full or fractional. 90% gold is cheap right now, but with the GSR at 75, silver is cheaper.

Good luck and welcome to the forum.

Buy an "x" amount periodically 'till you reach your investment goal. Keep good records. Do not be afraid to buy or sell. Do not fret when you buy on Monday and the price drops on Tuesday. Don't worry when you sell and the price rises the next day. Stick to your goals and you'll do fine. Never put all your eggs in one basket.

The rule that was passed down to me is "keep 1/3 of your money in readily available cash like cd's and savings accounts, 1/3 of your money in real estate and 1/3 of your money in gold and silver. Do that and you'll never go broke". It's worked for me for 45 years!

Welcome Mintyfresh:
Be careful out there and take your time. Prices are low and if they do go back up it will not be over night. I like you took an interest in buying silver and like you I had very little knowledge going in. I started buying small amounts when silver was in the high 30's. The talking heads on line said it was going up. I looked for advice on line.... I found it and it was crazy bad.
You did great coming here, there is some great wisdom here that I wish I had found earlier...it would have saved me some money.
My opinion but I would wait until prices are even lower or not at all. PMs are risky.
Some great advice above. If you have investment money maybe look at dividend paying stocks.
Again welcome.
I still buy the odd piece of silver, my over all cost per ounce is around $26.00 CAN. I would break even if I sold everything at $26.00 an ounce. I've gotten some great deals from people getting out but I'm still on the wrong side of making any money. I do not hold a lot so I can potentially hold the silver for 30 years. That still does not guarantee me of a profit. I'd rather have bought stocks in Apple 10 years ago.
Who will you sell your silver to if you plan to exit PMs? The buyer needs to make money also.
Again welcome.
Liverpool

See? I told you some smarter people than me would chime in.

I forgot to mention that I have less than 10% in pms. About a year ago I cleared all my debt except my mortgage and started investing. Most of my money goes into an index fund which is doing great, a little goes into pms, mostly silver because my budget is small, that hasn't done as well but I like the physical aspect of having a little stash and some pretty coins! Plus both investments are medium to long term in my plans so I dont lose any sleep.

Great conversation by the way! I am learning a lot.