Why I am buying physical silver.
Why I am Buying Physical Silver.
Hey Traders from around the world! How are you?! We've been chatting a lot recently about accumulating stocks and wealth. Many commodities, energies and metals are at some very strong lows relative to their yearly trend.
In regards to the longer-term viewpoints of metals, they are fully correlated to the value of the US Dollar. If the dollar gets stronger, copper, silver and gold will continue to decline in value and price. I expect metals to go lower, especially if equities take a nosedive in 2016. Here is a weekly chart of the US Dollar index.
It is currently in a sizable distribution phase. There is certainly a chance the Dollar index could trade back down to that $93 support. I've anticipated this for sometime. My chart from 3 months ago on the index.
This would cause metals and maybe energy to pop a bit in the near future. But a bounce off of that support and especially a break out of the resistance would cause energy and specifically silver to go lower.
How much lower? Well, that's a great question.
In regards to accumulation of silver (in my non-licensed opinion), it will depend on your age, account size and overall goals of investment. In my thoughts, if you are under 40, start buying silver in loads. Why? Because it's a physical asset.
Why 40? Well, I figure there's a chance gold, metals and especially silver will take their time to trade substantially higher. Potentially three to four years, from now similar to oil. [Of course, this could take even longer.]
Here was a conversation between a buddy and me. I asked him if he was buying physical silver. He said 'No. Buy property, buy land, and buy classic cars, all of those before gold and silver.â€
My reply was 'If oil isn't going to lose value, silver won't lose it's value either.â€
Overall, think about silver like this. If you want to buy a house as an investment, or a business as an investment, or stocks as an investment, you're going to shell out some serious cash. Silver, on the other hand, is trading around $15.00 an ounce right now. That's crazy cheap! It was in the $40s just a few years ago! Anyone can afford a few ounces at $15 an ounce. And I do mean anyone. I was nine years old and had a few ounces of silver.
That's why I mentioned the age of 40 earlier. Sure, if you are older than 40, you might not be buying silver as a capital gains investment, but as a nest egg retirement, potentially a hedge, or maybe a legacy investment for your kids, grandkids or other family members. I just don't know if silver makes a huge rally soon. It's purely at an accumulation spot for me. I plan on buying 3-10 ounces a month or so, stash and hold it, and years down the road it will be a nice physical asset. Similar to a home, but much easier to get in on the action.
I am not a doomsday analyst, although there are some out there. Always calling for the end of the world, mentioning the market is going to tank, everyone's going to go broke and zombies are going to take over the world. So - you're doomed.
That's not my style honestly. Sure, it gets internet clicks and sells classes. That's how the majority of trading companies make their income. They constantly are selling programs and classes. Since we don't sell classes at RLT, I do not have to go down the doomsday approach (thankfully) - but the entire 'the world is endingâ€ analysis and approach just isn't my cup of tea.
However, just in case the world does go the way of Water World with Kevin Costner (great film by the way, right?), silver and gold will be tradeable. You will be able to barter items with silver. This goes back thousands of years. Humans have always obsessed over gold and silver; emperors, warriors, queens, kings and pirates. Precious metals have always been alluring through time. If you get a chance, there's an amazing book outlining the affects gold has had on the human psyche. It's called The Power of Gold. Great book! Has a very interesting historical perspective on the allure of metals.
Is it easy to buy silver and gold? Yes.
Should you buy the ETF or physical metal? That's an amazing question, honestly. I would say, that depends on how pessimistic you are about the future. Do you think there's even a remote chance that the world turns to chaos and everything goes down the tube? Well, you should probably buy the physical metal.
You could always buy both. The ETF I like the best is SLV. The CTO of Real Life Trading has a few hundred shares of SLV and sells covered calls every month or so. He also likes silver longer term. Some of my good friends and traders like Butch, Larry, Ken and others are also accumulating shares of the actual ETF SLV. Honestly, neither is a bad thing to own. One could do both. Owning the physical bars or ounces of silver would be key for the apocalyptical traders.
Here are some of my charts on SLV and overall thoughts.
If you were wondering 'Where do I buy the physical metals, silver and gold?â€ Well, one of the most reputable sites is apmex.com. That's the one I use. I bought three silver bars there recently. The packaging is truly top of the line. The entire ordering process is incredible and no, I do not get a referral bonus for mentioning their site. Now if you actually call them on the phone for your order and tell them I sent you, sure, I might get a crazy small referral bonus of some kind, but that's not the point of this article, honestly.
I simply think owning this physical asset is smart. It's not expensive. It's not hard to buy. It's a good inflation hedge and Silver (honestly) will always, always, always hold intrinsic value of some kind and it is not hard to sell or trade with. You can sell back to apmex.com, or to a local bullion buyer/seller.
That's my case for buying some physical silver. It's much cheaper than gold, everyone knows what it is and the vast majority understand its overall value. Owning some really can't be a bad long-term investment. Of course, I would not recommend dumping your entire life savings into buying silver. It's all about accumulation. Maybe every month one could buy a pound or so. Hold, grow, accumulate and many years from now, shine.
Thanks for reading! Until next time, remember, love life, live life and trade it!
Jerremy Alexander Newsome.