Monday, January 12, 2015

Silver Stacking Size? 10 oz Bars

When I first started reading finance blogs in Singapore, I stumbled upon Dave at Smart Passive Cash Flow. Some of his posts are pretty motivational, which is always a good reminder to me that even with the best analysis skills, if you can't reign in your behaviour, it is very easy to fail. Anyway, the thing I like about Dave is that he is very open and clear about his big picture views which is explained very well-done through his goofy illustrations. I read up a lot about cycles after reading some of his posts and that was the tinder that got me quite a firm believer that the market moves in cycles.

Dave is probably the only precious metals "stacker" I know and seeing a post he did early December about what bullion he buys got me thinking about the kind of Silver that is good to "stack". Dave mentioned that he collects Canadian Maples and American Eagles for his 1 oz coins, and Royal Canadian 10 oz bars and Johnson Matthey 100 oz bars.

Personally, I think stacking silver first has to be value-for-money, which means only bullion IPM-grade silver should be bought. That means none of the numismatic stuff. Those are for hobbyists and serious collectors.

However, although value-for-money is important, I think liquidity is also important. So while you can probably get lots of silver at a great price, the source might not be well known. This means that they are less liquid and probably less valuable (it would only be bought back at spot). For example, American Silver Eagles are more expensive than most of its other coin counterparts, but it still manages to retain its premium even in resale. Most of the very commonly heard of names also have no problems being sold with a respectable premium over spot.

So anyway, I decided to do a simple study based on the products and prices available on BullionStar to help me decide which silver product would give me the best bang for my buck.


From the table above, you can see that Dave actually bought the best priced silver product in each category based on the premiums that he paid over spot. To me, the Royal Canadian Mint Silver 10 oz Bar looks like the best choice.


Benefits of Royal Canadian Mint Silver Bars 10 oz?
- trusted brand name and quality
- low premium over spot
- modern and good looking design
- serial numbered

10 oz bars have a reasonable premium over spot, while also being a very common product. A quick search on APMEX showed 32 X 10 oz products and only 10 X 1 kg products.

After looking at this data, I am very much convinced to "stack" Royal Canadian Mint Silver 10 oz Bars. The premium over spot is actually LESS than a 1kg bar, while the premium is marginal over a 100 oz bar, but which 10 times less capital outlay. That makes investments less chunky and more manageable to accumulate bits over time.

I just bought a piece through BullionStar and I shall be heading down soon to pick it up. If it really does look great and fulfill my needs, I think this will be my mainstay physical Silver investment!


Full disclosure: If you enter BullionStar through my site, and you buy anything, I get a small commission.

This is my main source of blog revenue. I prefer this to asking for "donations" because I rather you get something that you want as well, instead of a tip.

Whether you buy at BullionStar directly or enter from my site, the price you pay does not change.

My personal precious metals investments are stored with BullionStar and I pay the same fees as any other regular customer.

7 comments:

  1. Hi, please help us do a buy back price comparison amongst the bullion shops in sg. Thanks.

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    Replies
    1. Hi Anon,

      Did you previously ask about the buy back comparison? I actually did it half way and I forgot to continue! Maybe I'll do it this week when the prices are frozen, if I don't forget. I will try to make it the next study I do for PMs!

      Delete
  2. Hello,

    I stack silver and gold myself, and I prefer Canadian Maple Leaf coins as they have legal tender, as compared to bars.

    PS: I also run my own investment blog, check it out! :)

    ReplyDelete
    Replies
    1. Hi LepakInvestor,

      A fellow stacker, nice! Curious, do you just keep your Maples in the tube?

      It is legal tender, but I don't think anyone would ever spend it as legal tender, since we paid way over that! :P

      Actually, after you have a few tubes, would it not be more cost effective to move into larger bars?

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    2. It's a margin of safety for me - I can use the silver I bought as legal tender in CAD dollars. Also, it looks more presentable in coin form, as compared to a bar. Bars do have cost effectiveness, but it's mostly a personal and subjective decision when investing in physical PMs, just as investments ;P

      I try not to touch my maples in the tube which I intend to sell when the price goes up, but I do have loose maples and other coins which I "fondle" :)

      PS: We should exchange links :D

      Delete
    3. True true, whatever helps you relax and be comfortable with what you have. I started sleeping like a big fat baby after I started investing in precious metals too, haha. Care to share you bullion experiences (buy, sell, process), maybe through a post on your blog? Would love to see how someone else does it!

      Link is up!

      Delete
  3. buy silver and gold before the prices double
    http://www.live-counter.com/silver-production-worldwide/

    ReplyDelete

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