Thinking about buying Silver

[JenniferG]

This is something I just started researching recently. However in these uncertain ecomomic times is it really wise to put all of our eggs in one basket... 401k, savings etc. I'm still contributing to my 401k, I plan on keeping 5k in the bank for emergencies. But I'm seriously considering sending some extra cash towards physical silver each month. Extra info I'm 29 and plan on keeping it long term. What do yall think? Is investing in gold/silver a good move? I consider this "diversifying" my investments.

[carrotinvestment]

Silver has been unable to hold and cross 57500-58500 in last few week, and we have seen big fall. It made a low of 5216 but some support and short covering resulted in it closing at 53458. Now in this week, we may consider resistance at 56500-57000, downside support exit at 53000-52500, break and trade below, it will further downside target at 50000-495000-48500. Close above 58500, it will show real move but chances are very remote.

[greenskeeper]

JenniferG

Silver or gold the physical metal (not paper holdings) are what you want.

Silver is actually well undervalued if you go by the traditional ratio between it and gold.

[97guns]

what gk said, i am a huge proponent of physical silver. check out kitcomm.com for a wealth of information

[artwest]

In my opinion it is okay to have some physical (not the paper holdings) gold and/or silver. I think I would keep it under 10% and most likely in the 3-5% range.

If you are concerned about some kind of catastrophe, I suggest that you look at Hurricane Katrina. When that happened, people were not looking so much for money as they were for food, water and other supplies. I suggest that you look into buying some survival supplies.

[carrotinvestment]

Today's MCX Tips for silver which must be kept in mind, MCX silver jumps, resistance at Rs.56500-56530 and MCX silver gains, resistance at Rs.57268.05-57763.25

[Kooshiball]

Hi. This is my first time entry in this forum.

I must agree with artwest and greenskeeper. Physical gold and silver rather than paper gold and silver. If we can't touch it, then you don't own it. I have sizable portion of my portfolio in physical gold and silver because there is no counter party risk.

I believe histrical gold and silver ratio is 16:1 but now is 55:1. Given the fact that available underground silver is much less than avilable underground gold (There are currently 10 billion ounces of gold while only 600 - 700 million ounces of silver since silver is the industrial precious metal, such use as computer chip, all the elctrical appliances etc), I do expect silver price to shoot up once public realized this fact.

I believe there will be massive inflation due to Fed's money printing (QE1, QE2, Operation twist, TARP and more will surely come) so I surely agree with artwest about food. We need to prepare mainly three things; sound money, food storage and gun.

[NetSkyBlue]

The trouble is finding somewhere to unload your silver when the price shoots up. Nobody wants to buy it at that price.

I work in the jewelry industry, and when silver went to $45 an ounce, we had to quit buying it, because our customers wouldn't pay that price for silver jewelry. Many of our manufacturers quit making stock during that time, and would only make things to order, because they didn't want overpriced silver sitting in their inventory.

[LMA]

Jennifer, it is technically diversification but is it good diversification?

Silver and precious metals in general are very volatile and if I understand it right if you buy now you would be buying at all time high. Sure, it's a good think you are buying for the long term but historically gold has proven to be a poor investment so I deduct that silver has too, but I could be wrong.

When you say put all your eggs in one basket what do you mean? Because savings and a 401 k could be very different investments. A savings account has nothing to do with the stock market and without knowing what is in your 401k you really cannot tell if you are diversified or not.

If you want a more historically proven diversification strategy you might want to consider real estate...

[Kooshiball]

Only diversifying stock market is not the way to go. True diversification is to diversify to all asset classes: Stock, Real Estate, Commodity and Business. Many people says that diversifying in 401K by allocating different funds but it is not diversification at all... During 2008 crash, many people's 401K was simply evapolated because mutual fund can't protect from systemic stock market crash (Since all the stocks across are all smashed). Personally, I got out of mutual fnd (401K) long ago since I am expecting another Lehman moment is coming on horizon...

[LMA]

Originally Posted by Kooshiball

since I am expecting another Lehman moment is coming on horizon...

Why is that?

[Kooshiball]

Originally Posted by LMA

Why is that?

I looked at your website. It looks great by the way!

I am expecting another 2008 type crash is coming on horizon. 2008 crash leads collapse of bear sterns and Lehman brothers. Instead of corporation like AIG, in this time, european sovereign debt collpase ignites derivative explosion that will hit US financial system. This will leads to bigger bank failure. Call it another Lehman moment...

[LMA]

Originally Posted by Kooshiball

I looked at your website. It looks great by the way!

I am expecting another 2008 type crash is coming on horizon. 2008 crash leads collapse of bear sterns and Lehman brothers. Instead of corporation like AIG, in this time, european sovereign debt collpase ignites derivative explosion that will hit US financial system. This will leads to bigger bank failure. Call it another Lehman moment...

Thank you for the kind words.

I guess your prediction is as good as any prediction can be. I hope you are wrong for everyones sake. Still I am not sure silver will protect you though.

[PauletteGoddard]

Sure, keep 5-10% of your investments in physical precious metals. Keep watch for "Quantitative Easing" or "QE3" in the news. I started buying silver at $12/ounce and in hindsight it seemed a good decision. It might be a great time to buy now that silver dropped 22% in value from a year ago.

[greenskeeper]

Originally Posted by smith121

I heard that gold & silver rates are getting down. Any ideas?

by rates do you mean "price per oz"?

[KTP]

I took the route of buying a few mining companies instead of the actual metal.

I bought FCX at $35 and TC at $6.40. Both have low PE and run at a profit and are near 52 week lows. FCX even pays a dividend but TC is opening a new gold mine in the Klondike. TC makes most of its money in molybdium (probably spelled that wrong, but you don't have to be a spelling whiz to invest )

It is kind of fun owning a gold mine, heh heh.

[97guns]

Originally Posted by KTP

I took the route of buying a few mining companies instead of the actual metal.

I bought FCX at $35 and TC at $6.40. Both have low PE and run at a profit and are near 52 week lows. FCX even pays a dividend but TC is opening a new gold mine in the Klondike. TC makes most of its money in molybdium (probably spelled that wrong, but you don't have to be a spelling whiz to invest )

It is kind of fun owning a gold mine, heh heh.

alot of "experts" say the jr mining stocks will outperform physical metal, still not for me though. i am anti paper asset and pro tangible investments. my entire portfolio consists of physical real estate and physical metal, thats it. every month i put excess rents into metal. call me crazy but since 2009 my portfolio has nearly doubled from 280K to 420K through this system

[Kooshiball]

All the market forces and manipulations are definitely dominating in short term price of gold and silver. But, the reasons for holding gold and silver in the long term are pretty much intact including:

1. US national debt is over $15 trillion and if includes liability of other off-balance sheet, it will exceed $100 trillion and there is no way to pay them back except printing money or defaulting on their debt (Inflation).

2. European sovereign debt situation is getting worse and worse. Since US banking systems are hooked with sovereign debts from PIGGS nations, once those nations started to exit Euro, CDS will started to explode and will cause catastrophic damage to the US banking system. Fed's option is to bail those banks once this happens (Inflation).

3. Both gold and silver is extremely undervalued (Check the gold and silver ratio and Dow and gold ratio if you are interested in understanding how undervalue these commodities are compared to histrical average).

This year will be inflation year folks since there will be a war in Iran that will cause the price of oil and other commodities to skyrocket and Fed will initiate another dose of QE program (Called Notional GDP targeting). Let's see how high gold and silver goes...

[greenskeeper]

Originally Posted by KTP

I took the route of buying a few mining companies instead of the actual metal.

I bought FCX at $35 and TC at $6.40. Both have low PE and run at a profit and are near 52 week lows. FCX even pays a dividend but TC is opening a new gold mine in the Klondike. TC makes most of its money in molybdium (probably spelled that wrong, but you don't have to be a spelling whiz to invest )

you own a piece of paper, actually not even paper, a couple digits in a computer system that says you own shares in the company.

[greenskeeper]

Originally Posted by Kooshiball

All the market forces and manipulations are definitely dominating in short term price of gold and silver. But, the reasons for holding gold and silver in the long term are pretty much intact including:

1. US national debt is over $15 trillion and if includes liability of other off-balance sheet, it will exceed $100 trillion and there is no way to pay them back except printing money or defaulting on their debt (Inflation).

2. European sovereign debt situation is getting worse and worse. Since US banking systems are hooked with sovereign debts from PIGGS nations, once those nations started to exit Euro, CDS will started to explode and will cause catastrophic damage to the US banking system. Fed's option is to bail those banks once this happens (Inflation).

3. Both gold and silver is extremely undervalued (Check the gold and silver ratio and Dow and gold ratio if you are interested in understanding how undervalue these commodities are compared to histrical average).

This year will be inflation year folks since there will be a war in Iran that will cause the price of oil and other commodities to skyrocket and Fed will initiate another dose of QE program (Called Notional GDP targeting). Let's see how high gold and silver goes...

I recently watched a show on the gold in fort knox (if there really is any) and it was estimated to be valued in the 100 billions. I had to chuckle since our national debt is 15 TRILLION and rising.

Executive Order 6102 by FDR was the start of the mess we are in now.