Silver question [Purchasing as investment]

[Juice780]

I'm not sure if this is the correction place to ask this question but here it goes. I have been doing some research in investing in silver and it seems like a good investment right now. I currently don't have the money to invest in gold nor do I have the money to invest in a large quantity of silver. I am currently planning on purchasing 1oz of silver for every paycheck which will be twice a month unless the price increases dramatically. Now my question is, is this a waste of time only buying small quantities and should I continue what I am doing.

[WHL]

I'm not going to comment on if it's a smart idea for YOU or not, but I think your purchasing plan is fine. I have quite a bit of physical silver that I've acquired over the last few years and I have no plans to sell it.

[LadyGeek]

Welcome! Is silver your only investment, or part of a larger portfolio?

You'll get better help if you post your portfolio in this format: Asking Portfolio Questions

Also, read the wiki: Getting Started

[Juice780]

I'm pretty new to this I'm only 29. I have an Ira through wher I work and am just looking to a little extra while I'm young. Just don't have a lot of money to invest in right now

[LadyGeek]

That's why I asked. Why don't you do a little reading to see what this forum is about? You don't need a lot of money to invest, making regular contributions is most of the battle. Time will take care of the rest.

This is a good place to start: Getting Started Watch the videos and go from there. It can be as simple or complicated as you want.

I think you'll find that putting your extra money towards your IRA at work (called a 401(k) plan) would be a lot better for you. If you want, try posting in this format: Asking Portfolio Questions. That will give us enough information to help you make sure that you're getting the most from your investments.

You have nothing to lose but time. It's worthwhile, as learning about investing will more than pay for itself for the rest of your life.

[Peter Foley]

There is nothing wrong with owning silver (or gold for that matter) as a part of an overall strategy. What Lady Geek is suggesting is to develop the strategy first. It is hard to know how to advise you with less than a complete picture.

OK - Now for some straight up advice on silver from someone who has done it and no longer does. Physical silver has a wide gap in the buy-sell market. You need a fairly large run up in prices to earn back the roughly 5% difference. For this reason, silver/gold is better as a long term inflation hedge AFTER you have assets that might be hurt by inflation. As a relatively new investor, I would recommend you forgo any investment in silver for a few years. It is not as if the price is at historical lows.

[bertilak]

The advice to have an overall plan before buying stuff is good advice. Some possibilities:

• As part of an overall investment plan silver should probably not be kept as physical coins, bars, or trinkets. I would suggest the silver ETF SLV. More liquid and smaller bid/ask spread. I, personally, avoid investing in commodities but that is a different discussion and others may disagree.
  
  
• Some people own silver and gold coins as part of preparation for a major catastrophic event. In that case there is much more to do than collect silver dollars. As Warren Zevon said, "I'm hiding in Honduras. I'm a desperate man. Send lawyers guns and money. The shit has hit the fan." I'd add food and ammo to that list, but I don't bother with this either.
  
  
• If it's Zombies you are worried about, melting down silver bars to make silver bullets might help, if I have my horror legends sorted out properly. But this is not on my worry list.
  
  
• Owning silver as collectable coins is a reasonable hobby. I do some of this.

So, having a plan makes a difference in what you should do.

[jasonlitka]

If it's Zombies you are worried about, melting down silver bars to make silver bullets might help, if I have my horror legends sorted out properly. But this is not on my worry list.

You don't. Silver bullets are for werewolves, and depending on who you ask, sometimes witches. With zombies anything works so long as you inflict enough trauma to the head.

[Phineas J. Whoopee]

If it's Zombies you are worried about, melting down silver bars to make silver bullets might help, if I have my horror legends sorted out properly. But this is not on my worry list.

You don't. Silver bullets are for werewolves, and depending on who you ask, sometimes witches. With zombies anything works so long as you inflict enough trauma to the head.

Sound advice indeed but if I may inquire:

From a diversification standpoint, is it better to have specific weapons and ordinance prepared for each type of mythical threat one might face, or is it preferable, in a tactical sense of not having to choose in the heat of the moment, to use whatever might have the widest range of applicability?

After all, it should be possible to damage a zombie's head with a silver bullet just as well as with a (for example) zinc one, as long as you've corrected the charge to account for the mass and range, shouldn't it? And mightn't the differential cost be worth it, depending on how you value the time you would otherwise spend collecting, cataloging, and choosing amongst your other weaponry?

Or, to put it another way, and to obfuscate my path back to topic, when it comes to silver bulleting is there really such thing as an investment?

PJW

[z3r0c00l]

What research did you do specifically, and in what way did it indicate silver was good right now?

I strongly suggest you resist the temptation to jump into a risky investment in a format that is very difficult to use; holding physical silver. I also suggest you resist the temptation to buy something that has done well recently. Consider the counter argument to jumping into gold and silver right now: Buy low, sell high. Sounds like some new age thinking, but give it a shot. Don't be the "next greater fool" in the internet fueled silver game. And by all means, do not buy silver coins!

http://heraldnews.suntimes.com/business ... laims.html

[deanbrew]

What research did you do specifically, and in what way did it indicate silver was good right now?

I strongly suggest you resist the temptation to jump into a risky investment in a format that is very difficult to use; holding physical silver. I also suggest you resist the temptation to buy something that has done well recently. Consider the counter argument to jumping into gold and silver right now: Buy low, sell high. Sounds like some new age thinking, but give it a shot. Don't be the "next greater fool" in the internet fueled silver game. And by all means, do not buy silver coins!

http://heraldnews.suntimes.com/business ... laims.html

"Do not buy silver coins"??? I hope you aren't seriously equating purchasing US Silver Eagle or Canadian Silver Maples with Franklin Mint junk, are you?

[z3r0c00l]

I am equating buying coins with getting scammed. The fact that the Franklin mint scams people more than someone who is pushing gold or silver online is not entirely relevant to me. Silver coins have almost insignificant added value, at a significant price premium. Coins as bullion sell for something like 10% above spot. Franklin mint coins may sell for 1000% above spot price. Huge difference, but that does not make either one a good investment. Imagine buying into a mutual fund with a 10% front end load not to mention the losses incurred when trying to sell them again?

The idea that you will have to go through a coin dealer to sell your investment makes me shudder, as do the alternatives like selling those coins to a pawn shop. I think if you find yourself buying coins as an investment, you need to rethink things.

*Full disclosure; I collect coins as a hobby and regularly get bombarded with the precious metal hoarding nonsense.*