One the biggest decisions precious metals investors make is deciding on whether to purchase gold or silver. Some analysts recommend Gold over Silver because it is the king monetary metal, while other analysts believe silver is the better choice because its upside potential will be much greater in percentage terms than gold.
Many of the emails I receive from readers is on this very question. I don’t like to give out investment advice because I am not a licensed professional, but I can tell you what I and other analysts are doing.
Before I explain how I invest in the precious metals, I wanted to provide some interesting videos on the subject of gold and silver investing. In the first video three analysts, Ed Steer (GATA), Mike Maloney (GoldSilver.com) and Peter Spina (Goldseek.com) discuss how they invest in the precious metals.
Ed Steer from GATA prefers Silver over Gold, while Mike Maloney describes how he buys each metal depending on the gold-silver ratio at the time. I’ve heard of analysts who trade the precious metals by the gold-silver ratio, but it was interesting to find out how Mike purchases more silver when the gold-silver ratio is high and more gold when its low.
Furthermore, the next video explains the difference between buying “Official Coins” compared to “Private Rounds.” If someone purchases a coin, it’s a government produced legal tender, whereas a private mint sells rounds. This is an excellent video that discusses the pros and cons of owning each.
In addition, Mike Maloney shows how the GoldSilver.com Pegasus is produced and gives a history of the symbol on the coin going back to Ancient Greece when the original Pegasus was minted during 300-400 B.C.
Mike believes if you buy silver , you should purchase it as cheap as possible. He calls it the “Game Of Ounces.” I agree.
As I mentioned in past articles, I started buying silver in 2002 at $4.52 an ounce. The best way to add gold and silver to your holdings is by purchasing some each month or quarter. This way, you don’t fall into the trap of buying at just the HIGHS.
The reason I discuss energy on my site is due to how it will IMPACT in a BIG WAY the precious metals, mining and overall economy in the years ahead. Very few analysts pay attention to this energy connection.
For example, I don’t believe the Junior Mining Sector will ever recover. While some junior stocks may become commercial mining operations, the overwhelming majority will not. If you are going to investing in mining shares, it’s best to focus on the producers as peak oil becomes more of an issue.
Furthermore, I prefer bullion over stocks due to the inherent leverage in the Online trading markets. If there is a market crash with bank holiday, accounts may be frozen making it impossible to sell or liquidate stocks. However, physical bullion during this hectic time will be a true safe haven.
That is why I believe its best to hold mostly physical metal with some surplus capital to invest in the mining shares. I also like silver better than gold due to the fact that PEAK OIL will wreak havoc on paper and most physical assets.
As investors flock into the precious metals to protect wealth during this time, they will be in competition with Central Banks and wealthy investors for already tight gold supplies. Thus, silver will be the next best alternative store of value or as Mike Maloney says, “ECONOMIC ENERGY.”
Silver is just as good of a store of Economic Energy as is gold… it’s just a smaller amount. However, the rush into the precious metals will push the Economic Energy ratio up much higher in silver than gold.
Lastly, we must remember, investing in gold and silver is a test of patience. If you believe you lost out on the broader stock market gains over the past few years, then maybe you don’t have the correct mindset to own the precious metals. The stock and bond markets are being kept alive by Central Bank intervention.
It is impossible to know when the GAME OF MUSICAL PONZI’s finally ends. Which means, the best bet is be conservative by investing in real stores of wealth such as gold and silver and not paper assets that derive their value from a growing energy supply, which is peaking.
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