commodity purchase

[cpp324]

I was looking to potentially invest in buying silver and was looking to get some insight as to when to purchase / what to purchase and if to purchase.

I have watched silver pricing go up from 12.50 an ounce to about 14.50 over the past couple months. can anyone speak to expectations or if this is a good investment?

 

[elassowipo1]

The easiest way for the average investor would be to buy a Silver ETF. If you expect a decline in the US dollar then commodities would be a good buy. Large holders of US treasuries such as China have been diversifying their foreign exchange reserves into commodities such as oil, gold, copper, etc. in anticipation of this.

http://www.google.com/finance?q=NYSE:SLV

 

[Ulan Bator]

I was looking to potentially invest in buying silver and was looking to get some insight as to when to purchase / what to purchase and if to purchase.

I have watched silver pricing go up from 12.50 an ounce to about 14.50 over the past couple months. can anyone speak to expectations or if this is a good investment?

It depends on your situation. Do you want to buy physical silver? Many recommend taking possession of the actual metal to avoid what is termed counterparty risk. You can buy the maple leaf one ounce bullion coins but you will pay a premium over what is called 'spot' or 'wholesale'. This is because of an overall shortage of available coinage due to huge demand.

Buying a silver exchange traded fund like SLV has its risks. I have heard that there are rumours circulating that funds like SLV may not actually have the amount of metal in their possession that they claim to have. Also, there have been questions about title (ie. who actually owns the bullion) and whether or not they have been leasing it out for bullion banks to sell in the open market. They are not supposed to do this but there is so much corruption and price manipulation in the system, you have to be extremely careful. That is why many recommend simply buying the physical bullion and storing it in a safe deposit box.

As to timing, you should have considered your purchase last month. Silver has been on the rise lately but if you can handle the possibility that the price may weaken somewhat after you buy, then don't worry about it. Go ahead and buy. If you want to chance it, you can wait for a pullback but if the price really starts to move (as I personally feel it will) you might get left in the dust.

Check out Ebay to see what silver maple leafs are going for. This will give you some idea on what you'll end up paying.

 

[cpp324]

Thanks all for the quick reply!
I bought 100 oz bar from this mint: http://bullion.nwtmint.com/silver.php before. is there a particular type of silver to purchase? smaller coins vs bars? i've been reading and i believe there is less premium on bars but the downfall is that it is less liquid. any thoughts on this?
Also - what are my resale options? the easiest way is to sell back to the mint - although freight and insurance can add up!

thanks for the help!

 

[Ulan Bator]

Thanks all for the quick reply!
I bought 100 oz bar from this mint: http://bullion.nwtmint.com/silver.php before. is there a particular type of silver to purchase? smaller coins vs bars? i've been reading and i believe there is less premium on bars but the downfall is that it is less liquid. any thoughts on this?
Also - what are my resale options? the easiest way is to sell back to the mint - although freight and insurance can add up!

thanks for the help!

You're right. There is less premium on bars and they are less liquid. Again, it all depends on your situation. Since most people prefer their bullion in one ounce increments, it might take more time to sell anything larger. If you are able to just put your silver away and forget about it for a while just stay with the bars. If you feel you need more liquidity, go with the coins. Regarding resale, I'm not too sure because I own shares in silver mining companies as opposed to physical bullion but if you try to sell back to the mint, they will only offer you a wholesale or bid price which may be a bit less than you would get if you sold retail. To sell retail, go to eBay. You can sell it there and let the customer pay freight and insurance as a condition of sale.