written by reader Physical Gold or Silver

By Anonymous Questions, January 29, 2018

Travis-
I went to look through previous commentary. What is your preferred method to buying, selling and holding your 3% physical precious metals? How do you mitigate the buying and selling fees? Do you actually store the stuff?

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Travis Johnson, Stock Gumshoe

I take physical ownership and store it myself, and I don’t worry too much about the inherent friction costs (I buy coins, primarily, which generally trade at a substantial premium to melt prices). I have used many dealers, but generally find that APMEX has been the most convenient for me, and offers good service and prices (that’s not necessarily an endorsement of them over other similar brokers, I just have had good experience with them and don’t find prices elsewhere to be better).

My position is not so large that I have to worry about storage — my coins would fit fine in a safe deposit box at the bank or a safe or a buried tin box in the backyard. Everyone has to decide for themselves what combination of safety, convenience and access they require — I don’t particularly want to deal with leased storage from a far-away vault, and I like to lay eyes on my coins every now and then, but those allocated storage programs are generally lower cost than transacting in your own coins if you have a fairly large allocation to gold, and they might be acceptable for you.

Part of the appeal of precious metals for me is that it’s an enforced savings allocation — if I assume that gold and silver will keep my purchasing power intact over a very long period of time, which is my base assumption, then buying a few coins every now and then is a good way of building up that future purchasing power in a pretty illiquid form… which means that it’s harder to sell, so I’m not as likely to sell unless I have a very good reason.

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joeflo416
2 years ago

I too store my own precious metal coins, mostly silver rounds, i usually buy 5-10 ounces per month, i buy my stuff through provident.com, they have good services, fast shipping and good prices.

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