Gold News

Silver Investing "Never Stronger"

Can Silver Investing keep pushing the white metal's price higher...?

SO HERE IS my dilemma, writes Chris Weber of the Weber Global Opportunities Report in Daily Wealth.

I love the gold and Silver Investing area. I have more money in silver than in any other asset. And combining both silver and Gold Bullion, I have about 75% of my total net worth in those two precious metals. That figures includes everything else I own – real esate, stocks and cash as well.

To me, silver is that asset class that has the most potential to give profits in our age. So far, this has been the case. From $4 in late 2001 to nearly $32 per ounce today, this is a profit of over 650%. Can you tell me if any other index or asset class has done better since 2001...?

But, knowing Silver Investing as I do (I first bought it back in 1971), I know that it can quickly plunge, even if that plunge turns out to be temporary. And the last thing I want for my newer readers is for them to buy silver in large percentage terms and then see it fall by 30% or more. My heart has been sick at the numbers of people who have panicked and bailed out of silver when this happens. Usually, they never get back in.

This was the case for the last great silver investing bull market in the 1970s, and it has been the case this last decade. Last time, silver soared from $1.29 to around $48. That's a rise of over 3,600%. Yes, I was lucky to get in near the bottom and get out near the top. But I simply bought and held during all the many plunges during that time. But when silver plunges over 50% in a few months, the instinct is to panic.

We've seen such a move already this time. In March 2008, the silver price had just popped above $20, having soared by nearly 80% in price since that prior August.

Then it corrected. Sharply.

Silvr first plunged quickly to the $17.50 area, a fall of 20%. Then, like most corrections, it made a mild stab at a recovery. But the highest it ever got was still well below the old high. It got, I believe, to $19 and change – still a good 10% below the high. And then, it fell fast and hard, the way silver always does when it corrects. By October, it had broken below $10, and the total loss, from peak to trough, was 60%.

Of course, by late October of 2008, most silver holders had bailed out, unless they did like I advised and kept calm.

Now, fast-forward to today. I have been prepared for a similar correction in silver after what it has done starting from those $8.80 lows in late October 2008 to just at the end of last year, at $30.91. That percentage rise was 251%.

But here's the thing. Silver is not correcting like it usually does.

Yes, it fell back in January from the $30.91 peak of December 31 to a low of $26.68. Actually, it was a double low. It reached that price on January 25, then rose, and fell again back to this level on January 28. Since then, it has been all up.

Think about it. Silver falls initially from $30.91 to $26.68 per ounce – a drop of 13.7%. Normally, this is a small initial fall, and you'd expect to see a sharp initial fall of 20% or so. But then, it charges up again.

I'm telling you, I've watched the Silver Investing market for four decades in "real time" and much more than that in research, and I have never seen such strength.

So even though I would prefer to get my new readers into silver at much lower prices, I can no longer in good conscience advise my readers to wait on the sidelines in hopes of getting a discount.

You have to make a hard choice now. Ideally, you want to have as much of your money in silver so that if it never corrects back to $20 or even $25, you'll be in a position to profit from the big rises of the future. However, you don't want to have so much of your money in silver that if it finally does correct to those levels, you'll panic, lose heart, and sell out.

If silver goes over the old highs and keeps on going, this will mean the silver bull market is one of a strength so great as to make it a force of nature.

Buy Silver at live "spot" market prices – and slash your storage costs to the very minimum – using Bullion Vault...

Starting with $650 saved from his newspaper round, Chris Weber began buying and trading gold at age 16. A millionaire by 20, he switched into foreign currencies and debt investments as the US Fed finally started to tackle inflation in the early '80s. Now he shares his trades and insights with private investors through the Weber Global Opportunities Report.

See full archive of Chris Weber articles

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn



Market Fundamentals