Nov 3, 2014

WTF, silver?

Back in January, I wrote:
For the silverbugs who read, it has been on a pretty steady (albeit gradual) decline for several days and is now flirting with $19/oz. Can it go lower? Of course. Will it? Maybe a bit. I personally feel the days of $10 silver are long gone; $20 is my "buy what you comfortably can" price and if it went to $15 I'd be looking to load up at the expense of other things. 
Well, it has continued a generally down slope these intervening nine months, and spot is now around $16/oz (having dropped over $2 in the last six weeks). The end of Quantitative Easing 3 seems to have influenced the price, but I don't pretend to understand why.

Life changes lately (namely the job change and attendant pay cut) have made buying a lot of extra stuff less attractive. I did buy a few small pieces with my severance check, and I have another ATB set coming soon, but otherwise? Not likely to buy much. That said: if you can, it sure is a nice time to look at silver and gold, as both are awful close to a five-year low.

And it bears repeating:
If you're investing with plans to flip for a profit... One: do your own research. Past performance, future results, etc. I'm not an adviser. Two: the handling fees (shipping, insurance, etc) on flipping physical items can eat up any profits in a hell of a hurry unless the spot increase is huge. Three: investors do silver on paper (SLV options, and calls, and lots of other words I don't pretend to get).

If you're hedging with an eye towards a tangible asset with long-term stability, then physical precious metals are a great bet, and fitting them into your budget is a great way to build a nice nest egg. (Look up dollar-cost averaging. Buy a set dollar amount monthly, regardless of the spot price.) But only do this if the rest of your house is in order. Food, shelter, etc.


Old NFO said...

Your right. Trying to flip metals is NOT a winning situation for anyone other than the broker who gets his cut... sigh

Wally said...

I have a pile of silver that is looking really dead to me and I'm getting v-e-r-y close to trying to trade it for something shooty.

Yes, dollar cost average would tell me to buy more silver now, but I never really fell in love with silver as an investment.

Spot at $15.30 ? I think that investment is dead for a while.