My Perspective on the Silver Market

I hope you own some silver. And to try to bolster your confidence as a silver buyer or owner, I’d like to briefly review my personal history as a buyer and owner.

I first started buying silver when it was at $17.

And I was somewhat nervous. I bought 10 ounces from kitco.com – and my fears and concerns ran the gauntlet.

I worried I might be paying too much for shipping and insurance. I worried I might be buying the wrong coins. I worried my check might get lost in the mail – or that my coins might go `missing’ once they were en route.

Even though I had researched kitco, I worried they might rip me off. I worried I might be put on some kind of list for buying these coins.

And perhaps my biggest worry: I worried that I might be buying these coins at the wrong time.

Sure enough – as SOON as I put the check in the mail, silver prices started to drop.

And they dropped about $2 in two weeks. Including insurance and shipping, my coins had ended up costing me closer to $18.50.so $15 silver meant that I was already down about 19%.

But then it moved higher. I didn’t panic. I stayed pat. In fact, after that first experience I made a point of not even looking at silver’s price in the days following a purchase.

And I recently broke my own rule.

You see, the last time I bought silver was just a few weeks ago.

My buy price ended up being about $45.50 an ounce after shipping and insurance.


So… I pretty much bought silver at the worst possible time – and since my job as a commodity analyst basically forces me to watch commodity prices on an almost hourly basis, I had to break my own rule, and watch the screen as silver dropped like a knife.

And while it never feels good to take a 40%+ immediate whacking – I’m okay with my purchase. I didn’t purchase silver a few weeks ago in order to make immediate quick profits.

I bought it to protect a portion of my liquid cash savings from the devaluation of the dollar.

Will my silver investment ever turn from negative to positive? The answer to that question is the same as the answer to another question:

Will the Federal Reserve be forced to inflate away the Federal Government’s debts?

I believe the answer is yes on both counts – which is why I’m a commodity investor in the first place.

And even though I’m sitting on a significant loss on my latest silver purchase, if you dollar cost average all of my silver purchases, I’m sitting on gains of closer to 100%.

I feel like I’m tipping my hand a bit – but nearly EVERY time I’ve purchased silver or gold, the price dropped significantly within a month. If I had sold out of my positions every time the short term trend turned against me, I would have missed out on the biggest parts of the bull market trend.

So the important thing to pay attention to is not the day to day or even month to month price movements. The single most important thing to do is to continue to average into your positions as long as you think the trend is with you.

Picking your buying spots can be tough – and if you base the success of all of your purchases on how they perform in the short term, you’ll probably never be happy.