I go through the stratum of SK and usually end up with ample supplies of materials. These materials seem to go for cheap in the auction house, but I would guess in bulk they make quite a bit.
But aren't materials necessary for crafting 2* --> 3*,etc?
So, as I stated in the title, which would be the better choice?
It depends on what you want to make, as always. I never really sell my materials, unless I need cash right then, and then I only sell the stuff I am never going to use. I would save them if I were you, it would save the trouble of buying them back later if you needed them to craft.