Unfortunately, most investors who come to the choice or decision to buy silver stocks often time have bypassed the reasons for buying the metal to begin with.
The value of silver when considering it’s versatile industrial use profile and relatively low supply is almost to good to be true. The reason for this is that the price is not connected to anything close to reality.
Silver stocks look very interesting because the price has been so low for so long and by all accounts it should be much higher and most people find them interesting because they understand the underlying story about why one would buy precious metals.
Remember that people buy precious metals because of the fear that the dollar or the fiat currency that they are using to hold their money is going to lose value or that there will be inflation. Silver and gold look interesting because they are basing the price low and they traditionally hold value and inflationary environment.
Unfortunately the trader who is thinking about buying the stock or looking at silver because of the potential inflation hedge often forgets that not only are the silver mining stocks very volatile but the money used to buy them is still the same fiat currency, therefore your stock is denominated in the currency that you use to purchase.
Buying silver stocks maybe at some point, something very interesting as the metal begins to return to a price based on fundamentals. For the last 3 or 4 years at least since we peaked at almost 50$, silver has traded (performed) very poorly, most people who look at price performance before making a decision to buy will very likely miss the moment when silver doubles or triples out no where, which it has done repeatedly over the last few decades, despite the manipulation.
Value investors who are making a decision to buy silver stocks would be encouraged to think about the metal first, given that once you trade a fiat dollar for the physical metal the is something that you can hold in your possession. It’s out of the system and therefore a true hedge against inflation which if one looks around can see that the potential for inflation if we don’t already have a considerable amount of inflation is definitely there.Back to Silver Coins Home