Should we be investing in silver?

[SuzeOFan]

The Rich Dad guy says yes. What's interesting is the 'much anticipated' new stock for silver just opened 3 days ago. Very tempting...

I'd like to hear what uall think.

[Haku]

The conventional wisdom about precious metal is that it's flat but stable. Sure, there are short-term fluctuations, but I'd chaulk that up to speculation more than anything.

Also, if by "Rich Dad", one implies Kiyosaki's words of advice, my general feeling is Don't.

[SuzeOFan]

Excuse me for saying Haku, nothing personal of course,
but who the hell is John T. Reed?

Never hoid of him.

Why should I believe another self-proclaimed guru's rantings (because that's what he's doing) against one of his own peers? Jealousy maybe? That's the only motive I can see for writing such a *scathing* page on his website. (very amateurish website I might add).

I enjoy reading many columnists and what they have to say. I just brought up Kiyosaki's name because he had this interesting article:

http://finance.yahoo.com/columnist/a...ichricher/4027

I didn't bring up this subject to discuss Kiyosaki's credibilty. He's not the only one saying what he says. I wanted to hear what *you* people here in this forum think about silver stocks. That's all. Isn't this what this forum is all about?

[Haku]

I'm not sure who John T. Reed is either, other than that he has one of the most comprehensive articles I've seen online regarding the case against Kiyosaki's advices. Yes, John is scathing. Perhaps he's even jealous, I don't know.

However, many of his arguments are, in my humble opinion, sound. He's also not the only one who feels that way. Just a few days ago, I was in our local Barnes & Noble bookstore, flipping through the book "Investing for Dummies". Hehehe. Believe it or not, but towards the end of the book, that author also had a page where he specifically addressed and disagreed with some of Kiyosaki's words of advice. It's shorter and much less scathing, but the premise is the roughly the same as Reed's. Feel free to go check it out to make sure I'm not lying.

I don't have anything for or against Kiyosaki. In fact, I actually don't care who writes what. I only care that the content and its reasoning is sound. That said, the article you've provided is by far the best article I've ever read from Kiyosaki. I am not an expert and I can easily be wrong. Still, even Kiyosaki has stated in his article that "when the masses find out, another bubble will inflate and, of course, at some point burst." In short, he speaks of speculating for the short-term, and for that, I think he may very well be on to something.

Still, as I originally stated, I was thinking long term and precious metal has a tendency to be stable more than anything (as in, it doesn't lose much, but it doesn't gain much either). At least, that was the case until the last 20 years or so.

[sweeps]

Kiyosaki is notoriously bearish. He prefers hiding-in-the-bunker investing. That's fine, he could turn out to be right, but I'll take my chances with stocks over precious metals.

[wyett3]

I believe excerpts from this article: http://www.lewrockwell.com/paul/paul319.html were posted in another thread around here. Silver & Gold are resuming their roles as money after a 35 yr pause. Putting 15-20% (more if you like) of your money here will preserve your purchasing power. I wouldn't do Barclay's silver ETF though; it carries a 10% premium; go over here: https://online.kitco.com/sellprice/selling_pools.html for only a 2% one. Here's another excellent site: http://cmi-gold-silver.com/

[lucasrd]

I wouldn't chase returns or try hop on the next investing bandwagon. Consistent, systematic investing in funds that yeild returns between 10 and 20 percent is your best bet.

If you have maxed out a 401K, save to an emergency fund, and looked at other investments and still have capital left over...then you can speculate into other markets.

[poundwise]

An admitted oversimplification:

If silver is flat but stable, why not just put the same money into CDs or some other guaranteed return vehicle?

[nixuzer]

A little late to the party here but would recommend if you're considering buying precious metals then first be honest about what type of precious metal buyer you are.

1. Survivalist
2. Investor
3. Inflation Hedge

In most cases what you'll read on the internet about purchasing precious metals falls within one or more of those areas. For example a survivalist will tell you that PMs will probably return to their rightful place as real money so you should buy 90% or generic 1oz silver rounds (if they're a silver person) where an investor might look more to the PCGS graded coins.

Originally Posted by lucasrd

I wouldn't chase returns or try hop on the next investing bandwagon. Consistent, systematic investing in funds that yeild returns between 10 and 20 percent is your best bet.

If you have maxed out a 401K, save to an emergency fund, and looked at other investments and still have capital left over...then you can speculate into other markets.

Actually I would disagree and I thought that way before however I've met some interesting people who have done well by buying into a trend early and reaping the rewards. Recently met a gentleman who took $400,000 of mutual fund money and turned it into ~$1,600,000 in 4 years building a couple of really nice custom homes (plus he didn't pay capital gains on the money by selling at the 2 year mark) when the market was hot. That type of return would be very hard to match in your 401K scenario. Plus his risk was low because he lived in houses that were paid for so even if the market dropped he still had a nice little place to call home.

A different recommendation is to research and when you think you ready research some more and invest in what you understand. And always remember the greater fool theory in your investing life.

[nixuzer]

Originally Posted by wyett3

I believe excerpts from this article: http://www.lewrockwell.com/paul/paul319.html were posted in another thread around here. Silver & Gold are resuming their roles as money after a 35 yr pause. Putting 15-20% (more if you like) of your money here will preserve your purchasing power. I wouldn't do Barclay's silver ETF though; it carries a 10% premium; go over here: https://online.kitco.com/sellprice/selling_pools.html for only a 2% one. Here's another excellent site: http://cmi-gold-silver.com/

Here is another silver/gold e-currency that is nice to have because it is tied to your bank account and you can buy or sell, paying a small transaction fee.
http://www.goldmoney.com/

[nixuzer]

Originally Posted by Haku

The conventional wisdom about precious metal is that it's flat but stable. Sure, there are short-term fluctuations, but I'd chaulk that up to speculation more than anything.

Do you mind me asking what you consider short term?

[Haku]

Hey nixuzer. Nice name, by the way.

To me, short-term is anything 5 years or less, but it's not really set in stone.

[flash]

This happened late 80s, early 90s; people bet on silver and gold going up, and it did, briefly, before crashing right back down. It's been flat. In general, if you want to invest in metals, you need to watch the trends carefully and catch them at the right time, similar to other commodities.

Have both in the bank, and I wouldn't consider them an investment.

[Haku]

Part of what Flash mentioned was very likely the notorious Hunt Brothers fiasco, where they attempted to corner the Silver market until Uncle Sam broke up the monopoly. Amongst the countless speculators that lost big, the Hunts lost nearly a billion themselves. I believe they were also criminally charged, but I'm too lazy to verify.

However, prior to the Silver bubble, both gold and silver have been extremely stable. So stable that it was literally inert. Nobody made anything off of it. Really, one was actually better off with bonds or something. So, for the longest time, precious metal like gold was used as a stabilizing agent in a portfolio for the bearish investor. How ironic that it's currently being speculated as a hot commodity.

I admit that precious metal is looking pretty sexy lately, no thanks to our out-of-control national deficit and resulting weak dollar. For the short-term, even I am tempted to get myself a piece.

Thing is though, there will always be the latest hot trend in the investing world. It never fails. Nothing wrong with it, so long as you understand what you're getting yourself and your money into. However, if what you're really after is a kind of um... sensible investing, then chasing the latest trends isn't the way to go.

[baselle]

Why silver specifically and why now? Commodities in general have been going up rapidly for the last several months. The time to put some money on silver was 6-9 months ago.

The trick is to find the asset class that you think is cheap right now but will do well in the future. You've got to look beyond what the popular finance press is touting right now.

[Haku]

Baselle hit the nail on the head. If you must speculate, be a contrarian investor. That's all I'm going to say.