The ArabianMoney investment newsletter is a dedicated long-term holder of silver as an asset class, and anybody who has owned silver for three years has doubled their money. What other investment can say that?
We think silver investors will do better than that over the next three years. Global money printing and a tight supply position for this precious metal should lead it to outperform gold. Is there any sign of an end to money printing? Hardly.
Taming volatility
However, silver is extremely volatile and so calling the short-term price movements is particularly hazardous, and indeed the buy-and-hold approach avoids having to do so.
We know that timing big market swings can be very profitable. But only if you get it right. Get it wrong and you may have lost part of the long-term bull market and never see your money back.
By way of illustration we know some readers got their gold market timing last year right and sold out above $1,900. Well done! But don’t sit their with your cash until it passes that level again, or you have lost out: you timed the market right and still lost money!
So what about silver right now? The metal has gotten off to an excellent start to the New Year. It is up 14 per cent, comfortably outperforming any other asset class.
And yes ArabianMoney did suggest at the end of last year that this would probably happen (click here). But the silver price is now a bit overbought and at the top of the channel that the better chartists like Clive Maund see as likely to trigger a retracement.
Deja-vu
Back to fundamentals and we can see just why this price correction might well happen. Stock markets have rallied into the New Year and look ripe for a downturn with the Greek debt crisis entering a critical phase and the oil market facing a showdown with Iran over sanctions.
Then again the market optimists may have it right and silver will surge ahead on a settlement of the Greek debt and a concordat with Iran. However this leaves us worried that the short-term silver price surge may be over for obvious reasons.
That said the word in the Dubai Old Gold Souk is that silver will be around $60 an ounce by September (click here). Silver remains the ArabianMoney pick of the year for 2012 (click here).
Are we confident enough about a short-term sell-off to abandon a long-term position in silver? No. The next issue of the ArabianMoney investment newsletter (click here) will explain how to leverage a long-term position in silver for the maximum gain, and that is a lot easier than trying to make a short-term call on a volatile metal.
Peter Cooper is a veteran financial journalist living in Dubai and was formerly a partner in the dot-com success story AME Info. He is now editor and publisher of the ArabianMoney investment newsletter and website and an investor in precious metals.
0.69%
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0.4%
Time to buy or sell silver or take a longer view?
The ArabianMoney investment newsletter is a dedicated long-term holder of silver as an asset class, and anybody who has owned silver for three years has doubled their money. What other investment can say that?
We think silver investors will do better than that over the next three years. Global money printing and a tight supply position for this precious metal should lead it to outperform gold. Is there any sign of an end to money printing? Hardly.
Taming volatility
However, silver is extremely volatile and so calling the short-term price movements is particularly hazardous, and indeed the buy-and-hold approach avoids having to do so.
We know that timing big market swings can be very profitable. But only if you get it right. Get it wrong and you may have lost part of the long-term bull market and never see your money back.
By way of illustration we know some readers got their gold market timing last year right and sold out above $1,900. Well done! But don’t sit their with your cash until it passes that level again, or you have lost out: you timed the market right and still lost money!
So what about silver right now? The metal has gotten off to an excellent start to the New Year. It is up 14 per cent, comfortably outperforming any other asset class.
And yes ArabianMoney did suggest at the end of last year that this would probably happen (click here). But the silver price is now a bit overbought and at the top of the channel that the better chartists like Clive Maund see as likely to trigger a retracement.
Deja-vu
Back to fundamentals and we can see just why this price correction might well happen. Stock markets have rallied into the New Year and look ripe for a downturn with the Greek debt crisis entering a critical phase and the oil market facing a showdown with Iran over sanctions.
Then again the market optimists may have it right and silver will surge ahead on a settlement of the Greek debt and a concordat with Iran. However this leaves us worried that the short-term silver price surge may be over for obvious reasons.
That said the word in the Dubai Old Gold Souk is that silver will be around $60 an ounce by September (click here). Silver remains the ArabianMoney pick of the year for 2012 (click here).
Are we confident enough about a short-term sell-off to abandon a long-term position in silver? No. The next issue of the ArabianMoney investment newsletter (click here) will explain how to leverage a long-term position in silver for the maximum gain, and that is a lot easier than trying to make a short-term call on a volatile metal.
About Peter Cooper / Commentary Author