Archive for the 'Silver Investing' Category

Equities, Commodities, and yes, even precious metals went through a beating these last few weeks and ETFs like NYSE:SLV was no exception. The silver ETF was down today on a day that the DOW droped 140 points, the S&P 15 and the NASDAQ 33. It was truly a tough day to be an investor today, even in the economic downturn safe precious metals like gold and silver.

These metals have usually been a safe haven for those looking to invest outside of the equities and exchange markets that have been on a roller coaster after breaking 10,000 on the DOW early this summer. No one can quite tell where the market will go and that even goes for these types investments.

Although we’re still bullish on silver and other precious metals (yes even gold which has been up way too much even for our taste), this pull back of the market could spell a september just like every other september lately. For those that don’t know, September has historically been a pullback month and a month of crashes (although I’m sure someone can dig up info contrary to that) it’s what we’ve observed lately. Maybe it’s a back to school pullback.

All those parents realize how much education costs and taking money out of equities seems like a good idea. Well if silver follows suit, you may find some buying opportunities in there.

Investing in anything has it’s ups and downs and investing in precious metals like silver and gold is no exception to this rule. Silver is a commodity and the price fluctuates just like any other commodity. With the stock market taking wild swings a lot of investors are looking to invest in tangible items that still hold some real world value.

For one, being a precious metal silver is sought after for it’s glimmer in relation to making jewelry and other things of that nature. It’s a status, although small status when compared to gold or platinum, but none-the-less, a status symbol to own and wear things made of silver.

Silver is also used in electronics, although not as widely as other metals. Also, silver is used in industrial processing of many things as coatings and as additives to many processes that the world needs. So the use for silver isn’t going anywhere. And when the use of such a metal doesn’t go anywhere, the price someone is willing to pay for that won’t go anywhere either.

Why do we like silver? Because it’s cheap, relatively speaking. Gold has had a major run up this past year and silver has stayed stagnant. Will it catch up? We’re not sure. But we do feel as though it’s a little safer bet right now than it would be to put your cash into stocks. Who knows where those things are headed?

The previous metal market is enjoying all the volatility in the equities markets around the world lately.  With all eyes on the Euro decline, what’s happening in Greece, and if Asian markets are to follow this world-wide downward trend, metals like gold and silver are enjoying the ride.

After large upswings in the price per ounce of silver early last year, the price of silver has cooled down, until recently.  Silver is now touching all-time highs again with the price per ounce nearing the $19 mark.  ETFs like NYSE:SLV are reaching new highs with volume on that fund seeing larger than normal spikes.

Mining stocks, which have been a bit boring as of late, have also seen upswings in their prices, although with no real reason for such a turn. Investors are looking to put their money in more traditionally safe vehicles like silver trusts and silver bars and that is just where things look like they’re headed.

Demand for physical silver has soared due in part to strong industry and a desire for physical metals for investment portfolios.  But not all physical silver is created equally.  Investors need be careful to buy only physical metals that are worthy of investment, not collection.

Numismatic Metals

New investors in physical metals often make the mistake of purchasing numismatics, or those coins, bars, medallions, and ingots that are meant for collection rather than investment.  Generally, numismatics earn their value from their rarity, perceived value, or from their appeal as art.  Numismatic coins can often sell for multiples of the worth of the metals themselves, making them poor investments.

Investment Grade Silver

Choices in investment grade silver are plenty.  From junk bags of pre-1964 coinage to rounds and coins both foreign and domestic, there are a myriad of opportunities for the silver investor.  These silver products are better suited for investment because their value is derived directly from the amount of silver in the product.  For example, a 10oz bar will sell for 10x the current silver price whereas a rare American silver coin can sell for hundreds of times the value of its silver content.

Mind the Premium

Unlike exchange-traded funds or futures, physical metals do carry a premium over the current spot price.  This premium, usually 2-3%, helps cover the cost of transport, storage, and marketing of the metals itself where the futures exchanges don’t have as much overhead.  The premium isn’t all a lost cause since you’ll be able to recoup the premium upon sale of the silver, as all physical metals carry a premium over spot.  They have for the last century, and they will for the next.

The market took a rest for the month of December and most of January.  It looked like the markets of old, when prices just kept climbing with intermixing of small declines for profit takers to reap the rewards of the most recent jumps.  But, as news of inflation, jobless numbers remaining, and earnings not quite what everyone thought they were going to be, we’ve seen some large declines.

So, is it all money back into previous metals?  Ride the gold train all the way up?  We’re not sure about gold, but silver is definitely still looking good in our minds and remains a buy for many at the current price of $17 an oz.

Historically, silver is no where near it’s non-inflation adjusted price of $50 per ounce, while gold is setting a new high every other week.  So whats the deal?  Will silver finally correct itself or will we see the price of silver take a back seat as the rest of the words markets wait for the economy to recover.

Buying silver, as we said last month, for 2010 may be one of the smartest bets you can make with your money. And as we wrote that, silver was around $17 an ounce. Now, just days into 2010, it’s already creeping back towards it’s 52 week high.

$19 is near for the price of silver and if you want to buy silver, now may be the time to do so. With the jobs market still shaky and earnings reports for a flurry of companies on the S&P 500 due out in the next month, you may want to put a little bit in silver to keep your rear end covered.

Gold, although still rising amid recent selloffs, is high priced and difficult for some to get into. Well, silver tends to follow the trend of gold and you may want to ride the wave. Just look at the chart below at how closely silver follow gold. This is a 1 year comparison chart of the price of ETFs, GLD and SLV.

If you think gold is going to rise, you may just want to buy into silver and watch that price follow all the way up.

The recent stock market rally has allowed investors to regain some of the losses they endured last year.  Commodities like silver and gold are no exception.  You’d think with a strong equities martket they would be, but nope, this isn’t the case.

Instead, with the dollar looking to weaken based on a fed that continues to print money, precious metals may be a good buy.  So how do you get into precious metals?

Well, one way is to buy ETFs like the silver trust ETF SLV. These types of funds allow you to directly invest in silver and gold without having to buy the precious metals themselves. But the question is, will silver, and likewise SLV be abel to survive the market rally? We think yes. Even though gold and silver have had amazing gains, we think they will continue to do so.

Although this is just our opinion, you have to look at what might cause this. Inflation, due to all that money printing, may cause investors, who like to hedge against downside risk of their dollars being worth less, by investing in silver. Others may want to play the silver game based on the fact that china and markets like it, namely india, are expanding at a rapid pace, and all those people are going to need things with gold or silver in them.

That’s why, it may be prudent just to keep a little SLV or GLD in your portfolio for the time being.

Silver investing is what this blog is all about. Buy silver, invest in silver, get into silver! That’s what we say every day. But why do we say that?

Well, it’s not because we have to say that, we’re not analysts, we’re not paid by any of the big silver ETFs, we just like silver! One interesting point that we found in an article over at business 24 – 7 is about one fact.

The fact that silver is the only commoditiy that hasn’t jumped above it’s all time high during this commodity boom. Yes you read that right, every thing else has jumped above it’s all time high but silver. The precious metal silver is behind. And from what we’ve heard (only third hand so do your research) the silver supply is low and demand stays the same or is growing.

So why the low price?

We’re not sure. But it just adds to the reason why you should buy silver.

The iShares silver trust ETF, SLV is holding strong amid all this up and down buying and selling of silver and gold. The silver trust may be the best way to get into a silver market that some say is going to go even higher.

As oil continues to rise, gold and silver are tending to follow the trends set by the market. When there’s a sign that the economy could rebound and the dollar could be on the rise, the precious metals fall. But as the market shakes with rising oil prices, people are back buying silver and gold. A big way they buy these precious metals is to buy into the silver or gold ETFs (Gold, IAU).

These funds are easier to trade and cost an investor less in the long run than buying silver or buying gold directly in the form of bullion bars or coins. The two trusts are holding strong, fluctuating with the price of gold and silver as they should since they are backed by the precious metals.

The stock market is rebounding, the dollar is showing signs of strengthening, and banks may be doing a little better. A little. So should you be taking your money out of commodities like silver and gold?

The recent drop on silver prices may be a little premature but everyone new it was going to happen sooner or later. There wasn’t really a huge drop in production or spike in demand because of some discover about silver. It was a run up because the price of most commodities was increasing such as oil and especially gold.

So is this run-up done? Well that depends on a few things. Sure there will be price increases based on the economies emotion to financial news. But if you believe what many feel, that the huge growth in countries like China and India will keep demand on all the worlds resources, including silver, then investing in silver is still a smart bet for the long term.

Buying silver bullion isn’t your only option and may not even be the best one because of the tax implications of owning it. You may be better off buying ETF’s like iShares SLV Silver Trust ETF. You can trade it easily online and can hold it for the long term and take advantage of lower taxes should the price of silver keep increasing.

So that begs the question of Blog Silvers readers. Are you still investing in silver?