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Liquidation problem with precious metals?
I am sure that all of you out there who invest in precious
metals have seen the claims made by the experts, Gold to hit $1700-2500 an
ounce and silver to go to $100 an ounce.
If you are like me this makes you very excited. You sit there and imagine what you are going
to do with all that money. Will you go
on a vacation, pay off debts, buy a house or throw a wild party. The ideas/dreams are limitless. It would be like winning the lottery.
However unlike winning the lottery which is just a check one
can deposit into their account, how the heck are you going to liquidate your
precious metal stockpile if prices ever get that high? I have liquidated portions of my silver by
taking my coins and bars to the local coin shop. At $48 an oz at the time the shop had no
problem taking my silver, even though I did get the “Oh man you are like the
100th person who has come in today and sold us silver” look and
sigh. How the heck would they feel if
someone brought in 100 oz of silver at $100 an oz. That would be nearly $10,000 dollars out of
their pocket. Do this 50 times and the
shop has put out $500,000. I don’t know
the books on the local coin shops but I believe most wouldn’t be able to handle
that sort of large loss of money.
So what will the coin shops do? Most likely, they would be more than willing
to sell you their own silver or gold, but at some point they won’t buy any of
your silver back from you. So there you
go, you sitting on a stockpile of silver and/or gold and you can’t get cash for
it. This doesn’t do you any good if you
want to use your investment to buy that fancy vacation, that house, or pay
those bills.
So what is a good investor supposed to do? Well one could pray that banks will soon take
your precious metals instead of cash so that your bills can be paid. However a wise man said “You can wish in one
hand and crap in the other and see which one gets filled first.” So I won’t be waiting for my bank to start
excepting American Eagle Silver Dollars.
Instead, as I have told my readers before, when the time comes to
liquidate I will go to my local coin shops to check on if they are accepting
silver and sell off portions of my stockpile.
This is the quickest way to ensure that I get cash in my pocket for my
silver.
Another option for you precious metals investors who are
worried about liquidating your stockpile is to use silversaver.com. Silver Saver allows one to invest in silver
or gold by putting in a curtain amount either a week, $25 minimum, or monthly,
$100 minimum. From there whenever you decide
to turn your investment into cash, you can sell your silver or gold directly to
Silver Saver and have the money in your account in a few business days.
Many people would recommend selling one’s silver or gold on
EBAY. Granted this is a way to sell one’s
metals however I personally don’t like the idea of having the price I get be
determined on bidders online. Also, one
would have to hope that deep pocketed buyers are looking for silver and gold
because I believe that at $100 an oz. for silver and $1700-$2500 an oz. for
gold, only those with deep pockets will be able to afford silver and gold.
Now I am not saying that the time has come to liquidate your
investment. However like all investments
it is important to have an exit strategy.
So if you are just starting out or have been investing in precious metals
for a while take my ideas and build off of them.
One final note, please check out my Debt Limit by the
numbers blog at http://tblf311.wordpress.com/2011/07/16/debt-limit-increase-thoughts/
One must know that the debt limit is playing a major role in silver and gold’s
recent run up. Check it out before you
listen to the blame game that Democrats and Republicans are playing with one
another.
Good luck and happy investing.
