Depending on your age you may believe you will simply buy and hold bullion for the remainder of your life. Bullion is certainly easy to pass on to heirs if you so choose.
I know for a fact there are tens of thousands of young people, including myself, who are aggressively allocating our savings into bullion at the moment, as we believe this is the asset class that will outperform all others in the coming years. I literally have 95% of my net worth in bullion for I see it as having a near risk-less downside with tremendous upside potential in the coming years.
At the present moment I believe silver and gold bullion are heavily undervalued compared to real estate, the bond markets, global equities, and of course fiat currencies. At some point, I think there will be a major bank and monetary system panic and the fearful herd will come rushing for physical bullion. The problem is the industry’s infrastructure is way too tiny to be able to service that many bullion buyers.
Values will be bid up on bullion, most likely we will witness some sort of overnight revaluation of gold, and silver will come along for the ride as the two are cousins of a “counter-party free”, “I don’t trust anyone” trade. More than likely gold’s value will be reset higher in order to anchor the next monetary system. At that time I believe it will be attractive to begin divesting out of bullion, maybe back into high-dividend yielding equities and cash flow real estate properties in growing communities.
I don’t believe I’ll sell all my bullion; I will likely keep 10% of my net worth in them always as insurance. But when the corrupt structure of the current financial system finally gets cleaned, there will be new room for growth with opportunities for investment like we have not seen in the last 30-40 years.
When it is time to liquidate my metals and move into other asset classes, I want to be able to move fast. From metal, to fiat currency, then into the next asset class in not more than a few days time.
This is why I buy majority homogenous brands or like-kind bullion. I don’t plan on becoming a part-time coin salesman on eBay looking to squeeze premiums out of single coin sales.
Sure it’s fun to own one of each bullion bar and coin brand. I get the enjoyment of collecting, owning and touching various items, seeing them in real life first hand. But as an investor, always having an efficient exit strategy – that rules my thinking.
Imagine the laundry list of work involved in quickly liquidating say 50 to 100+ different items. Not easy for you and not easy for a dealer.
Say we hit peak gold and silver values over a few weeks time; I want speed on my side. Not long laundry lists of collections. I want a homogenous towering stack of bullion ready to easily flip into my next asset classes of choice.
The next article in our Beginners’ Guide to Buying Physical Bullion will discuss gold and silver stacking.