Since 2008, I have advocated demonstratively for my family, friends, and colleagues that they should have a position in precious metals in their portfolios. Too often, I am met with resistance of I can’t. I don’t have the money, should be stated as:”I don’t have the currency to purchase money”. Or, I don’t where to procure, when to procure, when to sell, and why? All of which are worthy of inquiry and deserving of a clear definitive response. Before we begin I would like to provide the following ‘Silver Cheat Sheet’ I composed years ago as a guide to provide clear terms used in the procurement for silver investors. It is my sincere hope that the following will resolve a lot of ambiguity for you:
1 Ounce = 31.103 Grams
BULLION: [Composition = 99.9% Silver]
- Silver Eagles (Made at the US Mint and state One Dollar)
- Silver Rounds (Made at a Private Mint cannot state One Dollar)
STERLING SILVER: [Composition = 92.5% Silver]
- Jewelry, Silverware, Panamanian Balboa’s
JUNK SILVER: [Composition = 90% Silver] Pre 1964
- $1.00 Face Value = 71.5% of the weight compared to 1 Oz.
- .715 Oz. (in grams to an oz.)
- Half Dollar (.50) = .715 x .5 = .3575
- Quarter (.25) = .715 x .25 = .17875
- Dimes (.10) = .715 x .1 = .0715
- Example Junk Silver Dime: Spot Price * .0715 = Price for a Dime
- Morgan or Peace Dollars = 26.73 grams @ 90% = .77344 Oz.
- 1792 Coin Act defined a dollar as 371.25 grains of silver = .77344 Oz
CLAD SILVER: [Composition = 40% Silver] 1965-1970
- Half Dollars $1.00 Face Value = .295 Oz.
(Credit: Bill Latour & Jason Sharon of https://www.lowcountrycoins.com)
Although the aforementioned is more specific to silver investors, I strongly believe you should consider an allocation of each form of silver in your precious metals holdings. There are merits for holding each respectively. Noteworthy of mention, although I respect and find the field of numismatic fascinating, which is a coin bearing a unique characteristic or a low mintage, I do not recommend for your precious metals portfolio.
WHERE: Locally, I suggest you conduct a google search and type (coin shop, type your zip code). If you are not satisfied with your of options. I recommend and have used the following:
www.lowcountrycoins.com – mails for free in the 48, wide selection of numismatic products.
milesfranklin.com – 28 Years of Service and zero customers complaints (that is not a typo – zero), over 5 billion in sales, offers gold, silver, platinum, and palladium, offshore storage, precious metals IRA’s, and fully insured safe deposit boxes.
If you want exposure as a proxy to owning the physical than look no further to:
I highly recommend the symbol: SPPP (Sprott Physical Platinum and Palladium). Why? It’s a publicly traded stock. For each share you purchase you own .0029 platinum and .0067 palladium. Therefore, if you own 345 shares you will own 1 oz. of platinum and 2.31 oz of palladium. Now if you do the math take the share price * 345 on any given day you will notice you are paying below spot price for your holdings once you add the price of 1 oz of platinum and 2.31 oz of palladium. Plus, ‘Spott’ allocates your holdings in a Trust, which is redeemable if you have significant holdings in the share. Finally, ‘Sprott’ is storing your metals for you. When you decide to sell you are being tax at the capital gains rate.
I do not recommend owning any Exchanged Traded Fund ‘ETF’s’ such as GLD & or SLV. They do NOT function as the ‘Sprott Trusts’. They are NOT allocated, redeemable only to sovereigns, are leveraged 100:1 (meaning 100 shares are claiming the same metal). Sounds a lot like fractional reserve banking or how goldsmiths used to function when they held citizens gold.
WHEN TO PROCURE: Yesterday! ! ! David Morgan of www.silver-investor.com points out the following myth about ownership of precious metals:”everyone needs to own a little” is mathematically impossible. As he states the terms everyone and a little are two ambiguous terms. Who is everyone and how much is a little? He further points out if every citizen in the U.S., which is about 5% of the world population owned 2 oz of silver that would exhaust the entire annual mining supply for a year!
WHEN TO SELL: I am not a trader. I am a cycles, contrarian investor. Therefore, I have long term view on my position/holdings. I would refer back to my previous blog: http://sofee.liberty.me/2015/05/14/which-way/
WHY: Refer back to ‘WHEN TO PROCURE’. Name 1 publicly traded company that is over 100 years old. Name 1 currency that is 100 years old that has not lost more than 95% of its purchasing power since its inception. Determine when was the last time gold and silver last went to a value of $0. Ask yourself why do Central Banks hold precious metals, yet don’t recognize them in the monetary system. Central Banks actually do recognize the price and holdings of precious metals, but they don’t openly share their sentiments with the public for fear of reprisal of their theft on their citizenry.
Proven & Probable
The featured image was created by: (Mick Baker)rooster