What is the best and safest way to leverage an investment and gold or silver ? I do not know how to trade ?
June 14, 2010 by admin
Filed under Silver Investment FAQ
I have never traded options. I also would like to find good stocks to buy based on higher prices for gold and silver.
Frankly there isn’t much of a way to make money off of current gold prices. Had you bought gold, or stock in a company that would prosper off of elevated gold prices, you would be doing great now. However, any company that will do well off of elevated gold prices will already be doing well, and thus there isn’t much room for improvement, making it an unsound investment. Gold has leveled off; it shouldn’t rise or fall too much in the foreseeable future. So an investment in gold or companies that prosper off of its price jump would not yield much for you.
However, if you are intent on buying gold, do your research. If you find a company that is poised to do well off of gold, find out more about it. But as I said, most companies dealing with gold should already be doing well, and with gold unlikely to elevate more, there is little to no room to make money buying into this market at the moment.
There is no safe way to leverage. Leverage is done to increase return and also increases risk. Just buy DLG or IAU – 2 solid etfs. 1 has pros do the futures while the other holds Physical gold.
Here is a thought. Buy marginal mining stocks. Their earnings and stock price will rise dramatically on any rise in gold prices. A safer approach but not so likely to score big results is to buy a stock like ABX or GG a couple of leaders in gold mining. Either approach is much much safer than buying options. Another option is to buy ABX and sell options against the position. Should yield about 12% annually at least, but it is all taxable at full tax rate. Not something to ensure best results.
You might ask, what are marginal gold mining stocks.
Maybe a couple to consider are AEM, BVN, GSS, KGC, RGLD, IAG
You cannot use “safest” and “gold” and “silver” in the same sentence.
Stay away from options if you are not experienced at investing.
If you want the safest way to invest in gold and silver (and safest means good diversification) Buy a no load precious metals mutual fund IF YOU BELEIVE THEY WILL GO UP.
Shares of precious metals companies have a leverage component relative to the price of gold, silver, platinum, etc.
The diversification comes through having shares of many different companies in the fund. The sector is known as being risky.
This being said, If you have a longer time horizon for investment, like buy and are able to hold for 5-8 years…I beleive you will see gold at , at least $1200 USD per ounce
That will make most Precious metals mutual funds go up by 3 to 5 times present value.
This market is volatile, and I personally feel there will be a drop before the end of April, At that point I will personally buy $600,000 in these funds. I made $120,000 in 2006 and already $150,000 this year when I sold at gold $685
I Expect gold at $750 in about 9 months and a big jump in this leg to probably over $900
I can sleep at night investing Half a million at a time, Keep your investment in your own comfort range, and don’t borrow to invest.
If you don’t know how, stay out. I have heard so many people promise that “gold’s going to $750” and things like that, and they are rarely right. In the meantime, the stock market averages 11% a year over time. Personally, I think you can do much better in things you can understand, like stocks of companies where you like what they do. Whatever you do, study up first and then practice by making fake buys, where you pretend that you bought something but don’t actually do it. Track how you do before you put real money in.
the selver is more risk and more profit.
you must have an equity to protect your trade