What’s the disadvantage of holding a few common one ounce coins?
RE: What’s the disadvantage of holding a few common one ounce coins?
Well the advantage of holding commone one ounce coins is you have REAL, PHYSICAL silver that you can buy and sell.
As opposed to this, Holding the SLV ETF simply means you have a piece of electronic proof that “promises” to hold silver for you.
The disadvantage of holding physical silver is TIMING I guess. By this, I mean if you held Silver by way of the SLV ETF, you can trade it quickly like a stock. You can for instance put a sell limit on your holdings if the price of Silver drops below a certain value.
For instance, I bought SLV when the price was $18.50/share (mimicking $18.50/ounce). It is as of today’s close, $26.55/share.
I am already in the money, but not willing to sell my shares yet in anticipation of it going higher ( how can it not when the government is debasing our currency?).
I put a sell limit for SLV at $21.50/share in case (yes, JUST IN CASE) mass dumping occurs on the ETF exchange. That way, I still make some profit (about 16%) if the silver market for any reason, were to crash.
I don’t think you can do that if you were to own physical silver.
Bigger bid/ask spread on coins than on the ETF. If you buy the coins you are immediately down a few percent from what you could sell them for. A quick look at GLD showed that spread at five cents, and that was after normal market hours. Even with commissions on buying and selling, one ounce worth of GLD shares would be a little over one percent loss from buying and then selling. And if you do it in bigger purchase amounts that percentage would drop.
EDIT TO ADD, I used SLV ETF as an example, but the same principle applies to the GLD ETF.
Regarding the coins, the spread is small at tulving.com. But those volumes are large.
Look at eBay sales, which have zero spread, but 3% paypal costs, plus eBay fees.