Stacking vs collecting for long term wealth preservation (UK)

Admin wrote:

ArcaneCollector wrote:

Admin wrote:Sorry it has taken this long to reply, 

It is so great to see everyone replying. And we all have our reasons for our views. After reading all the comments I can see you figured out how the @ button works, so no need to sort that out. And reading the other comments by Rod and Kimchi, I can understand why they would like Sovs. I personally only buy pure gold. The 22ct Sovs, are ok and have a market. Some are even really collectable. But for the Bullion and stacking side verse collectors side I would suggest 999 gold or better. 

That said I also like your Ductales reference, something I am wanting. But then I realise how small a kilo bar of pure gold is, I was hit in the face with reality that I wouldn't fill a paddling pool up. 

Anyway I am still dreaming.

@Admin In terms of stacking (i.e. accumulating) gold, surely it’s better to go for what has the lowest premium? Fractional 999 gold seems to have high premiums so I won’t consider those. So my options are to save up to get the 1oz 999 coins, or for a more regular “dollar cost averaging” approach, consider Sovs as fractional gold for more regular purchasing. Surely if you are buying as bullion, you want the lowest price per Troy ounce of gold content, and the extra you pay for 999 won’t see a return when you sell? Or am I missing something?

The main thing I consider when buying 1oz or fractional 1/10th oz gold or Platinum is how easy it is to resell and who would be the target buyer. This is why paying a small premium upfront on the 1/10th gold is a good investment. Meaning < I can sell to many buyers now my fractional gold I paid A LOT less for and make more than enough to buy a oz of gold today. Or I can release that money and have it for what ever I need. 

As your aware from my channel, I tend not to sell my own collection. But there is a huge demand for smaller bullion than 1oz coins. If I were to sell a 1oz gold coin, I could expect between Spot or if I am really lucky up to 6% above. If I sell fractional I can get a much higher return back when the gold markets are up. It great when they are down and that is when I buy the bulk of my fractional coins. But I see them all the time on Facebook and other platforms such as Fleabay etc going for a much higher premium. 

That being said, again you have the ability of selling Sovs for much higher if the demand is there and if it is a key year. It is more like coin collecting in that regards. Both are suitable but it depends on your budget. If I went back into time and were able to invest my own money into large bars and coins, I would change it for smaller fractional pieces to some degree. I would now stand to make more than " well lets say A lot " more than my initial investment.  But I bought into larger bars to ensure financial wealth for my family for when I pass.

Thanks @Admin that’s a great answer. So I need to consider my target audience when it comes to selling, and not consider that it will just be to a bullion dealer. Interesting! This is all new to me so I am learning a lot.

Absolutely. If you can't sell your bullion it isn't worth anything. If you can sell it then it's worth what the buyer is willing to pay. (This goes for everything that is bought and sold, not just bullion). If you have a choice of buyers, then sell to the one who is offering the most - or go to auction, but that's a whole other can of worms.

The Cat's Mother wrote:Absolutely. If you can't sell your bullion it isn't worth anything. If you can sell it then it's worth what the buyer is willing to pay. (This goes for everything that is bought and sold, not just bullion). If you have a choice of buyers, then sell to the one who is offering the most - or go to auction, but that's a whole other can of worms.

Absolutely, Most dealers will give you spot or just over spot. But being able to hit a wide audience is key. Appeal and demand are always what I look at now. 

I can offer my 1oz carded Gold Simpson to someone for £1800 and someone will buy it. I am not offering fyi. 
But if I took it to a dealer I will be lucky to get 6% over spot value. 

I can easily sell 10 of the fractional 1/10th oz gold Britannia's for about the same price and they will sell very quickly. It doesn't matter that I might have only paid £80 or under in some cases for them, or £120 at the peak. I can still make more today quickly than to try to sell a big ticket item. More buyers...

Some really great points made by all!

I never really understood people buying 1/10ths rather than Sovs when they have always seemed to be almost half the price (certainly proofs), but  @Admin has made a very strong case and I now do, that makes total sense, thanks buddy! I find the size too small really to appreciate myself, while I do still admire a nice Sov, it's a decent enough sized coin to feel a bit smug about for me lol. But to best cover different possible economic outcomes and to cash in on the 1/10th does make sense. It's also not too big a purchase if gold suddenly takes an attractive dip. And I do have to say that, while it's only put me off further on the premium side as that has risen with it, the 1/10th size has really become more and more popular in recent years.

Ounces are really only for serious long term wealth preservation for me. 1/4s and Sovs hit the sweet spot in terms of size and premium imo. But there are limited options for recognisable CGT free 1/4s and they are not such a popular size. The Queen's Beasts are one exception as they came out as low premium bullion coins, and it was only later in the series that the Royal Mint recognised their runaway success and started to raise premiums. That's my worry with the Tudor Beasts - some extra premium is already 'baked-in', and it'll be a while before we really know if they'll be a success or not. That said, it'll be the first major series to likely have two monarchs on it which could go in its favour (depending on how Charles coins do).

Interestingly the 1/4 QBs are more popular in bullion and outperforming the proofs in terms of return (partly but not totally because they are more closely tied to the spot price)! Many proofs lose money so be careful there.

Sovs are good honest bread and butter bullion and as liquid as it gets. You'll pay extra for the rarer/more desirable ones. Hatton Garden Metals used to treat them all the same, bought and sold as pure bullion. So you used to have a chance at getting a rare and valuable Sov at random! No more alas, they pick those out now and sell them at numismatic prices. But there's a lot of history still so it can be a relatively cheap way to have an interesting collection. I don't want to get into the verification side with older Sovs (they were always highly forged, sometimes very well indeed, enough to trick some present day dealers) so I just buy modern from trusted dealers. But I do have a nice 1888 my late aunt gave me which I love

Sovs were also the money of the Empire (whatever one's thoughts about that) so known throughout the world through trade as well as being currency, and minted in various different countries at times. They're still recognised and popular in many of those countries. In India Sovs are a traditional wedding gift to this day (usually locally made knock-offs now). Other members will know better but I think they're very niche in the US, and more the numismatic side only? I've no idea why, maybe they didn't like the price of our tea or something  

The numismatic side, for bullion I think the Queen Elizabeth IIs (particularly the early and low mintage ones in nice condition) will outperform their current price long-term, as people look to put date sets together. But as  @Admin says, you'll pay a lot for some of the rare ones. I am lazy so I just went for some of the special years in proof or bullion (1989, 2002 etc) and got into the yearly proofs when I found the hobby. I might buy the first Charles (I think it will do very well), and shall then retire. This year's a special year in bullion with a special reverse, likely to be very common but why not while they're out and no more than usual?

@ArcaneCollector you will never, ever want to be in a situation where you need money fast and have to go to a big dealer to sell. You will get around spot. You want to sell privately. A friend's friend wanted to sell his whole collection to buy a house and was shocked at how little a big dealer offered him, even for many nice collector or proof coins. As @TCM says for some stuff you would have to consider auction etc.

@ArcaneCollector did you get your Sovs bud? What do you think (looking forward to an honest 'review'!)?

There are not so many active very strong Sov 'advocates' (like me) on the forum so far as it's still growing so would love to hear your take on your purchase!

kimchi wrote: @ArcaneCollector did you get your Sovs bud? What do you think (looking forward to an honest 'review'!)?

There are not so many active very strong Sov 'advocates' (like me) on the forum so far as it's still growing so would love to hear your take on your purchase!

@kimchi Yes they did arrive! When I find some time I’ll take photos and write a review. I received one from 1927 and 2017, which apparently has privy marks on it. The new coin is more of a coppery colour, but it looks great. Despite being small, the coins have a weight to them, with I like. And when I hold the 1927 coin I wonder how many pockets the coin has been in, and what it has bought over the last 100 years.

ArcaneCollector wrote:

@kimchi Yes they did arrive! When I find some time I’ll take photos and write a review. I received one from 1927 and 2017, which apparently has privy marks on it. The new coin is more of a coppery colour, but it looks great. Despite being small, the coins have a weight to them, with I like. And when I hold the 1927 coin I wonder how many pockets the coin has been in, and what it has bought over the last 100 years.  

Great stuff, glad you like them! They may not be your way forward, you may well find you like other things better, but hopefully a great start for you (I think it is, I don't think you can go wrong, but I was a bit anxious as it was my advice and I want you to be encouraged, not disappointed!).

Yes the 2017 privy mark is for the Queen's Sapphire Jubilee, not a bad start at all! My dealer friend tells me there's no great premium but they are always popular and fly out the door The history is phenomenal isn't it? My sole 1888 it's incredible to imagine what it was used for as it was circulating currency then. And alas it's too late now, but I wish I had asked my late Aunt and Uncle how long it had been in the family, it was one of their real treasures, so I feel very honoured to be the present 'custodian'.

Look forward to the review when you have time!

kimchi wrote: @ArcaneCollector did you get your Sovs bud? What do you think (looking forward to an honest 'review'!)?

There are not so many active very strong Sov 'advocates' (like me) on the forum so far as it's still growing so would love to hear your take on your purchase!

@Fortune8 is a Strong Sov guy. 

In fact he keeps trying to get me involved. 

I have a book he sent and I am interested in learning more. But I just don't know enough about them. Unless I bought them new from a dealer ( who was reputable ) I wouldn't know if one was fake or not.... That is the other side of my concern. 

I said it..   

And I do have a 1/2 Sov.... but I never explored it further. 

i might...

Admin wrote:
@Fortune8 is a Strong Sov guy. 

In fact he keeps trying to get me involved. 

I have a book he sent and I am interested in learning more. But I just don't know enough about them. Unless I bought them new from a dealer ( who was reputable ) I wouldn't know if one was fake or not.... That is the other side of my concern. 

I said it..   

And I do have a 1/2 Sov.... but I never explored it further. 

i might...

That's why I stick to new ones...generally lowest premium, nice and simple to verify (basically I am lazy when stacking, and collecting would get into a minefield. I would love it, but I know I would get addicted!).

What half do you have? They can be very good bets depending on the year, some are very low mintage compared to the 'big brother/sister'. By the time I got into the 'special' year modern Sovs (1989, 2002, etc) the full ones were too expensive (though the main ones have skyrocketed more since!) so halfs were a nice way in. But many regular years are also low mintage and going to have good premiums going forward. Overall, the halfs are still undervalued and growing in popularity imo, as people are priced out of full Sov sets.

They are also quite wide for their weight, which is very attractive to me. My mate loves 1/10ths in general, and the Somali Elephants are his thing because the diameter is also very generous compared to most. I have some anniversary 1/10th Kooks and they are too small (width) for me to like much...and I am big into Kooks