How Do I Buy Silver?

Recently a friend asked me, “How do I buy silver?”

Before I mention that, here’s WHY you want to own silver.

Silver has been on a tear – but not during the last year. For about 11 years in a row, silver increased at about 24% annually on average. But for the last year or so, silver has been flat, after peaking at close to $50 an ounce and then declining to the mid-twenties. So, what gives?

Actually, nothing. According to GATA, the Gold Anti-Trust Action Committee, there are 3 banks that work on behalf of the Federal Reserve to short silver and gold and keep the prices constant so the dollar seems stable. Gold and silver work inversely with the value of the dollar, so when they are rising, it’s obvious that the dollar’s value is falling (due to the enormous money printing that has occurred).

Does this pause in silver’s skyrocketing price mean anything significant? Does it mean the bull market is over? The answer is no. It’s common during bull markets that pauses like this occur. It’s called consolidation and it happens after large moves up such as silver and gold have had.

It’s a great time to take advantage of the $29 price per ounce. Someday, I believe we will look back and say, “I can’t believe silver was ever so cheap!” Many billionaires own silver or silver mines and are expecting a large move up as the dollar becomes more and more devalued due to excessive money printing and government debt. The two are inversely related.

Recently, one of my clients went to buy silver American Eagle coins (my favorite) and the dealer tried to sell her another form of silver. Junk coins and other silver coins have silver in them, but I prefer American Eagle coins (or Canadian Maple Leafs if you’re Canadian) because:

American Eagles are the only coin where the weight, content, and .999 purity is guaranteed by the US Government.

Dealers will try to sell you something else if they sense you aren’t sure about wanting the Eagles, because they are hard to come by and they can sell you something easier for them to get and earn more markup.

Junk silver quarters and dimes are .90 silver and .10 copper. They are fine to have, but they do not have as much silver as American Eagles.

New or used Eagles are ok and the 1 oz. or 1/2 oz. are great, although I prefer the 1 oz. myself. Dealers will offer you the “spot” price, or the price that silver sold for that day on the COMEX, the exchange that trades the price of the raw metal, plus a few dollars. That’s their profit margin and also covers the cost of making the coins, insuring, and shipping them to the dealer.

The spot price plus a few dollars is what they will charge, so if today the closing spot price is $30, and they add $3 (“spot plus 3”), then you’ll pay $33 an ounce for a one ounce American Eagle silver coin. (I like gold coins too, but they are a lot more expensive at $1,660 an ounce).

Silver bars are fine to buy for larger investments. There’s also the green “Monster Box” from the San Francisco Mint with brilliant uncirculated coins. A Monster Box will cost about $17,000 and remains sealed from the Mint.

Beyond that, you may want to start diversifying into mining stocks, ETF’s (but NOT GLD or SLV) and even physical silver and gold held overseas at Goldmoney.com.

Bottom line, buy silver. It’s better to have bought some, even if it’s not ideal, than to have bought none. The potential is enormous for those who take action.

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