Stacking vs collecting for long term wealth preservation (UK)

Hi all

Silver newbie here, so apologies if this topic has been covered to death already. In the UK the mark-up on silver is around 45-60% due to dealer premiums and VAT. So I appreciate that the strategy for sing silver for wealth preservation needs to be a long term one, on the assumption that the value will steadily grow over time. (or perhaps using silver this purpose is daft, and you should stick to gold for wealth preservation and keep silver collecting as a fun hobby?)

So what are the best coins to buy for this purpose? Is it best to try and buy the cheapest secondary market bullion coins or collectible coins? When it comes to selling them in the future, to me, bullion coins will always just have a value somewhere around spot on the day. Will collectible coins retain a higher value vs spot (or increase in value)? Or does this depend entirely on how popular they may be? For example, the Queens Beasts coins seem to be fetching higher prices than what people bought them for, due to the current popularity of the series and collectors wanting to fill gaps in their collections. But move forward 10 years. Will they still be worth more per ounce than standard bullion coins, or as collectors may have moved on to the latest shiny toy, they are just essentially bullion coins?

Thoughts welcome

All welcome here!!!

You will no doubt get a variety of replies. We all see things differently, and then of course this is an international forum too so there may be very different sentiments coming from different countries and perspectives at different times

45 - 60% is a LOT. I wouldn't pay that for bullion certainly, or for coins that are released but tend to be viewed as bullion even if they are supposed to be 'collector coins' to some extent. From the Royal Mint recent releases both the Robin Hood coins (terrible production problems unfortunately) and the new Coat of Arms @AceBullion featured on his channel both fall into that category (for me).

For stacking I would look for Brits or similar 'stacking' coins (which can include 'duff' examples of many others, such as the two I've mentioned) at maybe £2 (at very best) to £4 over spot (which would be something like 10 - 20%) from trusted sources. (You could put a 'wanted' ad on here for free and others will guide you, or you can ask others via PM if it's a good deal).

What do others think of the figure I've given, I am happy to be corrected? I know independent secondary dealers who buy at spot plus a pound or two for generics (Brits etc) and sell for not much more, but maybe this isn't realistic?

The problem here is, we're in a strange moment where these stacking basics which were previously reliable (imvho) don't encourage folk to sell at that kind of price, so you need to find a seller who has a need to sell fast (for unexpected bills etc). And people are nervous about what may happen with the banks and Fiat, so would rather hold onto their silver if at all possible.

That said, the general feeling is that the paper markets are manipulated and that silver is still a good insurance policy (if you spread your risks/exposure) even at £25 I think, though coins can still be had for less.

I think that's key - you are looking at and thinking about this now, and not after something serious has happened (if you believe it will as I do, or even just if you think it might, and would like to be a bit better covered with some physical metals than nothing at all).

What I've found myself in the last year is that when 'bullion' or 'standard' coins have been harder, and so pricier, to get hold of (and this for me is key - despite the spot price) 'premium' coins (in general) do not get the same boost. So, a Britannia for example got as high as £27 (secondary) but a rare collector coin I had did not see any increase.

Gold is obviously much easier to store a decent amount of wealth in a small space, and the buy and sell margins (e.g. bullion sovs) are tighter. You can spot opportunities here sometimes. For example, I bought a Queen's Beast Completer gold coin or two at +5/6% spot on a dip, rather than a Britannia at, say, 3/4%. Gold is now up about a hundred pounds an ounce, so my 5/6% is now larger. Moreover, the coin (although bullion) is now more collectable (bullion gold Brits are generally not - the Queen's Beast bullion were and are) and I've seen prices rise on that aspect too.

Long-term, yes of course the Completers may lose some premium, they will certainly lose the number of collectors looking for them. I think this is true of a lot of coins, so as a collector (particularly with silver) I think it's wise to see your coins as a hobby you enjoy (with benefits) and mainly enjoy your coins! Buy what you love, and love what you buy! Silver bullion can just be put away/buried/hidden around your home and forgotten about, that's the beauty of it.

Lastly, I know many of us who have been around PMs for a few years who baulk at the price of gold right now (I know I do). But I do actually think it's still reasonable (just mvho!) and there is good mileage left in it. If I had a lot of money and was worried about the banks I know where I'd be putting it!

There is more to collector coins but looking forward to seeing what others think, hope this has been helpful (at least maybe to get some thoughts going - whether I am right or wrong ).

If I could go back and start my silver stacking journey all over again I would buy silver Britannias and nothing else.    I got some things right and I got some things wrong.  The things I got right were just by pure dumb luck, I began stacking in 2015 when silver spot was at rock bottom, a lot of my purchases initially were around about £12 an ounce.  The things I think I personally got wrong was trying to mix things up with premium and collectable purchases.  It's like a shot through the heart when you pay 4 or 5x what you would for bullion for a collectable and it begins to spot or tarnish, also I'm not great at picking what's going to be a hit and bought a load of stuff that's a miss and I'm also not great at recognising the  right time to sell  The peak time to sell comes and goes and I'm still holding onto what I bought, someone more adept at spotting what's going to be sought after and the timing on when to offload might have totally different advice however.  Being in the UK just buying Britannias does away with all this and I get the  capital gains tax exemption if i decide to sell or pass them on to my kids.  The bulk of my stack is Britnnias but i have tubes of Philarmonics, Somalian Elephants, Kooks etc that I now wish were just Britannias.

I was also lucky that I managed to build up my stack when spot was lower and when we could buy cheap silver under the margin scheme from Europe paying 6% vat instead of 20%,  those days are long gone. If I was beginning my stacking journey again today I would only buy enough silver to give me a position and nothing more just in case something happens and it goes to the moon.  Today I would be concentrating on gold as 3% premuim is a massive difference from 33%

Now I am only finishing off sets I have started collecting in silver or i will buy first editions in a new series just in case they become sought after later if they take off but every purchase increases my cost average and it's a cost average that used be nice and low.

Thank you @kimchi and @Rod Panhard for taking the time to write considered responses to my question. You have have given me great food for thought!

ArcaneCollector wrote:Thank you @kimchi and @Rod Panhard for taking the time to write considered responses to my question. You have have given me great food for thought!

Most welcome bud and I'm sure you will get other replies that will get you thinking.

@Rod Panhard makes some really great points!

What a question and certainly you will have mixed views and opinions. 

I would suggest to any new stacker, collector, or someone who wants to buy shiny things. Follow this rule below. I can not say this enough to anyone starting off, but be safe. 

1)  ALWAYS buy from a reputable dealer when first starting out!!! You will get to know your stuff before moving onto groups or Flea Bay for buying items. 

2) DO NOT for the love of frogs, buy poured silver ( I state this as AceBullion on my website!!! DO NOT BUY )

3) Buy cheap, second hand or dealer discounts. This is to establish a " BASE" Stack of foundation. 

4) For every 10 oz of Silver you buy, Purchase a 1/10th fractional Gold 999 piece, NEW ie 2022 or 2021.. Do NOT buy anything that is not pure. 

5) It is ok to TREAT yourself if your budget permits. So buy something you like!!!!!  This is your reward! 

If your budget can stretch to other metals, I strongly suggest buying fractional Platinum 1/10th every 3-6 months. 

And finally your BASE stack should be something that will cover your other items such as Gold and Platinum and Your Treats in case of a emergency or to later progress into something more substantial. IE selling some because you have too much ( I should follow this rule ) and then I can free up cash to invest into more Gold and Platinum, or other Silver pieces. 

Finally you are your own person, You and ONLY You can make your decisions. But if your trying to think if you should rack up credit card debt or pull out a loan for Precious metals..... Don't please.... that is just soo wrong. 

I will leave you to think this over. And good luck.

I look forward to seeing your collection growing.

Great advice @Admin. Thanks for reply . Regarding point No.4, when you say pure are you only referring to 24k? I ask as 22k sovereigns seem to be the best value for anything smaller than an ounce.

Hi @ArcaneCollector . @Admin has as usual given very good advice, as befits his advanced age and seniority (don't worry, he'll try to get me back later). I think he did mean 24ct gold, judging by the 999 reference, but I'll let him answer the query about sovereigns. Anyway, I thought I would put in my two penn'orth as a not-really-stacker.
The two most important points in my view are, firstly not to get into debt to buy precious metals and, secondly to enjoy the hobby (which you probably won't do if the banks are chasing you). It also helps to be clear about why you are stacking/collecting. I can't help much with the stacking aspects, and we have members who do know what thy are talking about on that aspect, but I do collect. Since I'm not going to be reselling apart from an occasional divesting of duplicates, and my heirs can do what they like with the pieces, the premiums are of lesser concern than the overall price. There does come a point, though, when I think 'there's no way I'm paying that for an ounce of silver', but it is all purely subjective.
I started by seeing a review of the Queen's Beasts coins, liked what I saw, and it snowballed (or went downhill, depending on your perspective) from there. I collect because I love silver, and the coins and rounds I go for are, in my subjective opinion, of significant artistic merit and are beautiful or interesting or quirky. There are quite a lot of them! I also have silverware and jewellery. Basically, I am a bit of a butterfly but I do have some rules in the interests of staying solvent and being able to feed the cats, who are even less forgiving than banks. I also have other interests, which also require expenditure, that I have no intention of dropping.
You do need to treat yourself from time to time. You will inevitably see something that doesn't fit in with your overall aims, but which you will kick yourself forever if you don't get it.
Your collection or stack should enhance your life, not be a burden to you, and I reckon it helps to have something you like to look at instead of wall to wall boring bog-standard Britannias.
This has probably been of no actual help to you at all, but I hope you found it amusing.

The Cat's Mother wrote:Hi  @ArcaneCollector .  @Admin has as usual given very good advice, as befits his advanced age and seniority (don't worry, he'll try to get me back later). I think he did mean 24ct gold, judging by the 999 reference, but I'll let him answer the query about sovereigns. Anyway, I thought I would put in my two penn'orth as a not-really-stacker.
The two most important points in my view are, firstly not to get into debt to buy precious metals and, secondly to enjoy the hobby (which you probably won't do if the banks are chasing you). It also helps to be clear about why you are stacking/collecting. I can't help much with the stacking aspects, and we have members who do know what thy are talking about on that aspect, but I do collect. Since I'm not going to be reselling apart from an occasional divesting of duplicates, and my heirs can do what they like with the pieces, the premiums are of lesser concern than the overall price. There does come a point, though, when I think 'there's no way I'm paying that for an ounce of silver', but it is all purely subjective.
I started by seeing a review of the Queen's Beasts coins, liked what I saw, and it snowballed (or went downhill, depending on your perspective) from there. I collect because I love silver, and the coins and rounds I go for are, in my subjective opinion, of significant artistic merit and are beautiful or interesting or quirky. There are quite a lot of them! I also have silverware and jewellery. Basically, I am a bit of a butterfly but I do have some rules in the interests of staying solvent and being able to feed the cats, who are even less forgiving than banks. I also have other interests, which also require expenditure, that I have no intention of dropping.
You do need to treat yourself from time to time. You will inevitably see something that doesn't fit in with your overall aims, but which you will kick yourself forever if you don't get it.
Your collection or stack should enhance your life, not be a burden to you, and I reckon it helps to have something you like to look at instead of wall to wall boring bog-standard Britannias.
This has probably been of no actual help to you at all, but I hope you found it amusing.

Thanks for the insight from a collector’s perspective. As someone with an obsessive personality type, starting to collect silver coins is a slippery slope. Not from the financial aspect, but the inevitable issue I always face of storage! For example, I started collected silver plated dragon and wizard figures from the Tudor Mint and now have over 300 of the pesky dust collectors! If I have 300 1oz silver coins I wouldn’t have them on display and would also worry about theft. I need a walk-in vault! I’ll ask Santa.

I think I need to find the right balance. Perhaps a few tubes of Brits and some gold in case of economic collapse and as a way of diversifying my portfolio and spreading risk. And they collect the odd shiny thing that grabs my attention. Who knew I needed a coin with a Kookaburra stamped onto it? What next, a wombat I have to have?

Noob question. How do you @ someone with gaps in their name?

When you reply to a post, you will see a host of icons across the top of the reply box. One of them is a @, it is probably next to the bright yellow smiley face. If you left click on it a box appears, the first line shows the @ and then a list of members' names. If the one you want is at the top, click on that and it will magically appear in your post. If you can't see the name, type in the box with the @ the first couple of letters, so if you were tagging me you would put 'the'. the name should then show up and you can click on it etc. Have a go.

The Cat's Mother wrote:When you reply to a post, you will see a host of icons across the top of the reply box. One of them is a @, it is probably next to the bright yellow smiley face. If you left click on it a box appears, the first line shows the @ and then a list of members' names. If the one you want is at the top, click on that and it will magically appear in your post. If you can't see the name, type in the box with the @ the first couple of letters, so if you were tagging me you would put 'the'. the name should then show up and you can click on it etc. Have a go.

@The Cat's Mother I am doing this on my iPad so the layout is different, but there is an @ symbol and I found you in the list.

I'm using a laptop, so it will be different, although I believe there is a button on an iPad to get the PC version on screen. But you have found me, so there's probably no need. There'll be no stopping you now.

ArcaneCollector wrote:Great advice @Admin. Thanks for reply . Regarding point No.4, when you say pure are you only referring to 24k? I ask as 22k sovereigns seem  to be the best value for anything smaller than an ounce.

Absolutely on all counts! You want liquid, easily identifiable and clearly genuine coins, especially from trusted sources at first as  @Admin says. Sovs, although not 999 or 9999 (% - yes 24k) generally offer the smallest premium and in the UK are the number one coin to build a stack from imo, and are extremely liquid. I would absolutely start here, and the way things are looking, start sooner rather than later so you at least have some gold! The 2022 bullion Sov also has a special reverse for the Jubilee which may or may not attract a slight extra premium in future (my guess is not much but others are always popular a dealer told me).

If you check the main dealers you may sometimes find some good deals on certain 1/4s but I would stick to main British coins (CGT free at the moment). I know some people like the 1/10th e.g. Britannia and they make great sense for stacking (easy liquidity of smaller value) especially if your initial/regular budget doesn't stretch to a whole Sov. But the premiums don't make sense for me personally on those, and have been steadily going up the last few years as more people stack.

I'm not so sure about buying multiples of the Tudor Beasts for many reasons (do ask if interested)...

ArcaneCollector wrote:
Thanks for the insight from a collector’s perspective. As someone with an obsessive personality type, starting to collect silver coins is a slippery slope. Not from the financial aspect, but the inevitable issue I always face of storage! For example, I started collected silver plated dragon and wizard figures from the Tudor Mint and now have over 300 of the pesky dust collectors! If I have 300 1oz silver coins I wouldn’t have them on display and would also worry about theft. I need a walk-in vault! I’ll ask Santa.

I think I need to find the right balance. Perhaps a few tubes of Brits and some gold in case of economic collapse and as a way of diversifying my portfolio and spreading risk. And they collect the odd shiny thing that grabs my attention. Who knew I needed a coin with a Kookaburra stamped onto it? What next, a wombat I have to have?

A few tubes of basic bullion like Brits and some Sovs should be the aim is perfect for a starting base in general imo.

You raise an excellent point about the hazards of collecting, I would be careful here, but you sound already well aware That said, if you can afford 300 dusty plated figures (however cool) and not worry about theft, given the choice to swap for 300 assorted ounces of silver (probably cheaper?) I know which problem I'd rather have!

And yes, you can treat yourself For Xmas I got a silver foil map of Middle Earth (as it appears in the books) which is very cool but yes very expensive for a 'coin' (yes it supposedly does count as one, believe it or not!)

Thanks @kimchi. I have been looking at the Sovs. Can’t say that I like the ones post-2000 when they changed the recipe. They look like shiny copper pennies to me! Maybe I should stack some of the “best value” sovs from dealers, just to stack and build a foundation, and not be bothered about condition?

ArcaneCollector wrote:Thanks @kimchi. I have been looking at the Sovs. Can’t say that I like the ones post-2000 when they changed the recipe. They look like shiny copper pennies to me! Maybe I should stack some of the “best value” sovs from dealers, just to stack and build a foundation, and not be bothered about condition?

I would just buy whatever you can get at the right price, Hatton Garden Metals used to be good for used gold, all  guaranteed weights and authenticity etc.  

I should add that when it comes to silver I went for a split between stacking bullion and collectable because when I started the trend in spot price was downwards and the idea was the collectable stuff would offset this, from the 2011 high it just went down and down.  I think we can all see that has now changed and the trend in spot price is now definately upwards.

ArcaneCollector wrote:Thanks @kimchi. I have been looking at the Sovs. Can’t say that I like the ones post-2000 when they changed the recipe. They look like shiny copper pennies to me! Maybe I should stack some of the “best value” sovs from dealers, just to stack and build a foundation, and not be bothered about condition?

I think your last sentence is right! Pure bullion sovs are not for getting out and admiring, it's about having some real money invested in gold, that's what you appreciate them for! That said if we take Chards as an example (I have no bias towards them and no connection) if you buy their 'minty' Sovs you will get a random newish year one that looks good as new. If you want variety then their 'best value' are presently £4 cheaper than those or the new 2022. They might be new or they might be older, and there may be very slight variances between older sovs. I just go for newer ones myself as I don't mind the colour and I am a simple man who like to keep things simple lol.

Hatton Garden has been mentioned by Rob, I like Atkinsons, there's another newish dealer I can't remember the name of right now who have recently been the cheapest. Don't forget to check prices including delivery!

kimchi wrote:

ArcaneCollector wrote:Thanks @kimchi. I have been looking at the Sovs. Can’t say that I like the ones post-2000 when they changed the recipe. They look like shiny copper pennies to me! Maybe I should stack some of the “best value” sovs from dealers, just to stack and build a foundation, and not be bothered about condition?

I think your last sentence is right! Pure bullion sovs are not for getting out and admiring, it's about having some real money invested in gold, that's what you appreciate them for! That said if we take Chards as an example (I have no bias towards them and no connection) if you buy their 'minty' Sovs you will get a random newish year one that looks good as new. If you want variety then their 'best value' are presently £4 cheaper than those or the new 2022. They might be new or they might be older, and there may be very slight variances between older sovs. I just go for newer ones myself as I don't mind the colour and I am a simple man who like to keep things simple lol.

Hatton Garden has been mentioned by Rob, I like Atkinsons, there's another newish dealer I can't remember the name of right now who have recently been the cheapest. Don't forget to check prices including delivery!

@kimchi Done! Just ordered two bullion grade sovereigns to get me started. Followed by a Domino’s pizza to celebrate (any excuse)!

ArcaneCollector wrote:
@kimchi Done! Just ordered two bullion grade sovereigns to get me started. Followed by a Domino’s pizza to celebrate (any excuse)!

Blimey, a man after my own heart, no messing about LOL! Hope you are pleased with your purchase buddy, and please let us know Did you get capsules for them? Not a bad idea. A tube (if you continue with them) can be easily hidden just about anywhere round the home, but I like mine in caps (there are bigger tubes for those too) no matter the condition they come in

From now on you have an interest in watching the gold spot price! But, don't get disappointed when it goes down (there are always downs) nor too excited when it goes up, the main thing is you are almost half an ounce already better prepared than 99% of the population (in money terms, jewellery aside)

Now, my last piece of advice is never, EVER make an impulse purchase after a few beers

@kimchi Good idea to get some caps, and a tube for them. My ultimate plan is to fill my indoor swimming pool with sovereigns so that I can swim in them like Scrooge McDuck. Ok, maybe not a pool, a bath tub. Ok, maybe not a bath tub, perhaps a bucket. Ok, maybe not a bucket, more like a jug. Ok, perhaps a teacup and I can swirl my finger around them!

Hi, I collect UK coins as well as bullion and in the coin world it’s very much condition is king.

For example you can buy a 1911 crown in bad shape for under £10, but I have paid £140 for a near perfect one yet in terms of silver scrap value they will not be far apart in weight (worn coins generally weigh slightly less).

I do think Bullion coins will take off in a big way in the coming years as the coin collecting market is starting to get stagnant, those random and rare bullion coins may grown in value far beyond their silver scrap value.

Just my opinion

SanMarino wrote:Hi, I collect UK coins as well as bullion and in the coin world it’s very much condition is king.

For example you can buy a 1911 crown in bad shape for under £10, but I have paid £140 for a near perfect one yet in terms of silver scrap value they will not be far apart in weight (worn coins generally weigh slightly less).

I do think Bullion coins will take off in a big way in the coming years as the coin collecting market is starting to get stagnant, those random and rare bullion coins may grown in value far beyond their silver scrap value.

Just my opinion

Thanks @SanMarino I am learning a lot in this forum!

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 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?

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.