Gold and Silver Stacking: Expert Guide
Gold and silver bullion are two of the most popular assets sought by investors. They are used for building a hedge against inflation and protecting against economic uncertainty.
Silver and gold experience episodes of short-lived price bursts during which phenomenal gains can be seen. Still, prices of these and other precious metals usually correct themselves over time. They find their own equilibrium within the prevailing economic winds.
They also have a 5,000-year track record in this regard. The metals have proven to provide steady, long-term appreciation. Their prices keep pace with, and often exceed, the rate of inflation.
That’s why many formal and informal investors stack physical silver and gold. But what is stacking? Why should you do it? What are the benefits and pitfalls of stacking silver or gold?
What Are Silver & Gold Stacking?
Stacking silver or gold is a method of accumulating silver or gold bullion in physical form. Most stackers plan on holding onto their metals for long-term gains.
Stacking gold and silver is a way to secure your financial future for the long haul.
Physical gold and silver are generally available in the form of coins, rounds, and bars (or ingots). Buying precious metals is one of the easiest forms of asset investment. It requires virtually no paperwork, no trader or broker fees, and no special tax documentation or other legal hoops and hurdles. You can store your gold and silver bullion on your property (or another safe location as you wish) and buy or sell it as and when you please.
Benefits of Gold and Silver Stacking
Imagine having your very own stockpile of silver or gold! Maybe you've been building it for years and years. (If you started off in the 1980s or '90s, silver and gold could be bought for less than $5 and $350 per ounce, respectively!) Or maybe you're just starting out now and are planning to hold onto it for a long time—perhaps decades.
1. Protects Your Wealth
As the last several years have shown us, the United States is on an unprecedented socioeconomic and political path. The current affairs around the world aren't looking any brighter, either. Should world economies contract, the dollar shrink, or other economic mayhem ensue, stackers can still sleep well. Silver and gold are two coveted precious metals that, over 5,000 years, have outlasted virtually any civilization or economic system in existence today.
2. Trade or Barter
You can privately barter silver and gold or cash it in. It may help pay off your mortgage, erase college debt, or buy that boat or recreational vehicle you've always wanted. It's yours to do with as you please.
3. Sell for Profit
If you've been holding onto your metals for just the right amount of time, you might make tremendous profits that trump any of the other investments you may have made of the years.
Surely, the benefits of stacking silver and gold are many. They usually come down to one important thing: versatility. These metals can be traded with little hassle while offering security and personal wealth in ways that no other asset can.
Common Goals With Stacking Bullion
Most stackers are looking at the long-term investment benefit that comes with owning a large stockpile of silver or gold.
Some people attempt to make money from buying and selling bullion when prices move quickly. This might happen during tumultuous economic episodes, for example.
Unlike these bullion flippers, a typical silver or gold stacker has a long-term aim. Their ambition is to stockpile a certain amount (or perhaps any quantity) of silver or gold over time. They wait to sell until the value of these metals has far surpassed the out-of-pocket investment they made in acquiring it.
Some stackers have no particular sale date or profit motive in mind. Instead, they are holding onto their metals in case of a personal or economic emergency.
Other stackers accumulate large quantities of silver or gold with no particular investment goal or liquidation plan. Rather, they do so because they like the feeling of wealth or the sense of accomplishment of having their own stockpile of precious metal.
How Much Precious Metal Should You Stack?
The answer will vary from person to person. It's helpful to think of your gold and silver stack like a savings account. How much savings would you need to retire comfortably? This is a good ballpark to start with.
Stacking silver has a lower barrier of entry than gold stacking due to silver's lower price. You can get started for as little as $10 or $20 at a time. There is no minimum number of ounces needed to consider yourself a "stacker"! Keep in mind that a silver stack will take up significantly more space than gold.
How you allocate your stack between the two metals is also a personal preference. You might choose to split your gold and silver equally by dollar amount. At the current precious metals prices, this would leave you with about 80 times as much silver weight as gold weight. Some stackers may prefer to stack more heavily towards gold instead. You can always rebalance your ratio of gold-to-silver by selling some of one metal to buy more of another.
Typical Strategies & Techniques for Stacking Bullion
1. Start Small
One can begin stacking silver or gold with literally two pieces of silver or gold in-hand. This may symbolize the mindset of some stackers who approach bullion stacking with an incremental strategy. They add silver or gold to their stockpile in drops and drabs—as funds and opportunity afford.
Most stackers are not necessarily "rich." In fact, many are working-class and middle-income investors. Therefore, additions to their stockpiles may come in small quantities: a gold coin or silver round here, a silver or gold bar there.
2. Buy in Bulk
Conversely, those who are flush with disposable income may take a decidedly different tack. They may buy as much gold or silver as they can, especially when prices are favorable for bulk purchases.
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Buying in large volumes is the most efficient way to stack precious metals.
Regardless of the size of one’s stack, bear in mind that, ultimately, a silver or gold stack is essentially a physical accumulation of metal. So, it’s important to have a protected and structurally secure place for storing gold or silver coins, round, and bars.
3. Consider Storage Options
While bank safety deposit boxes are one avenue for this, the typical stacker will want to keep possession of their bullion on their property. In this case, a safe or vault in a hidden and environmentally sound location will prove among the most feasible and secure of storage options.
Of course, if you don't want the liability of storing all of your metal at home, you can pay a small fee for vault storage at an authorized depository. This storage option is a requirement for any stacker who wants to include precious metals in an Individual Retirement Account (IRA).
Differences Between Stacking Gold Versus Silver
Gold and silver are similarly treasured as worthwhile investments. There are, however, some key differences that come in stacking silver versus gold.
The primary one? Space. The ratio between silver and gold prices is currently huge—about 80:1. In other words, it would take about 80 one-ounce silver bars, rounds, or coins to equal the value of just a single one-ounce gold bar, round, or coin.
Therefore, if you’re tight on safe storage space, you might consider using gold to constitute some or all of your bullion stack. Of course, this also has a cost element, which is the other major difference between stacking silver and gold. Silver represents an affordable entry point for anybody who wishes to become a stacker. Gold, on the other hand, is much more cost prohibitive for those who have smaller bullion budgets.
Common Silver and Gold Stacking Mistakes
1. Not Considering Storage Space
It's not uncommon for stackers to buy a bag of low-grade silver coins in order to achieve the feeling of wealth or the appearance of physical volume.
For instance, 35% silver wartime nickels and 40% silver Kennedy half dollars or Eisenhower dollars are among the most affordable silver coins. Bear in mind that, due to their lower shares of intrinsic silver, such coinage takes up vastly larger shares of stacking real estate.
Gram for gram, these coins require more space than 90% silver coins or 99.9% silver American Eagle coins. Buying large amounts of 35% or 40% silver coinage is awesome—it's inexpensive and contributes to your stack. But be sure you've got enough (safe!) space for adding these lower-purity coins to your bullion stockpile.
2. Buying From Questionable Sources
Another typical stacking mistake? Buying anything with silver or gold in it. . . Maybe. Instead of buying cheap silver or gold, buy “good” silver or gold.
Silver or gold coins, rounds, and bars bought via online swap meet sites, unvetted marketplaces, or other alternative sources may leave you with counterfeit or subpar products. Even if it costs a little more, buy your coins, rounds, and bars from trusted and reputable sources.
Buying from coin dealers or bullion brokers ensures you’re buying authentic silver and gold of the fineness and purity as advertised. You'll also want to stick to buying recognizable products that are popular and easy to sell.
If you are stacking silver coins or gold coins from the United States Mint or other major world governments, you will have no problem liquidating those products. The same applies to bars or rounds from well-known and respected private mints. (And you can sell them for proportionately much higher returns on your investment than those no-name rounds and bars ever could.)
3. Not Diversifying
Finally, don’t forget to diversify! No reputable coin dealer or bullion broker would ever suggest you dump all of your investment money only in gold or silver. Precious metals should represent only a share of a diversified investment portfolio.
Yes, stacking silver and gold can help insure you against financial losses in the future should the economy lose ground or other unforeseen socioeconomic (or personal) matters interrupt daily life. But if your silver or gold stack is where all your investment money is going then you might not come out as far ahead financially as you wish.
4. Expecting Too Much
A common misconception is that silver and gold prices will always go up. History has proven to this point that is not always the case. Silver and gold can make excellent investments, but their prices have fallen in the past. While they may only go up from here, there is no guarantee they will.
Start Stacking Precious Metals With Gainesville Coins!
Silver and gold stacking can be for anybody and everybody. You don’t need to be a jet-setting Wall Street player to score big gains with bullion. Neither do you need to have a lot of money to begin building wealth and security with a stack of silver or gold. You can begin stacking with only a few pieces of precious metal and can take as long as you wish to accumulate your stack.
If you have any other questions about stacking silver or gold or wish to start or continue building your stack today, contact the bullion professionals at Gainesville Coins. We’re ready to help you achieve your silver and gold stacking goals. A handful of our most popular products are listed below.
Joshua McMorrow-Hernandez is a journalist, editor, and blogger who has won multiple awards from the Numismatic Literary Guild. He has also authored numerous books, including works profiling the history of the United States Mint and United States coinage.
More buying guides from Gainesville Coins:
The Best Way To Buy Silver: A Guide to Buying Physical Silver
American Silver Eagles Values - Complete Pricing Guide
American Gold Eagle Values: How Much Are They Worth?
What Is a Silver Nickel Worth? (More Than You'd Expect!)
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