Silver Investing Shocking Secrets
Feb0
Silver is a precious metal just like gold. But as compared to gold, silver has far more industrial applications that includes in bearings, welding, conducting electricity, photography, brazing, soldering, washing machines, jewelry and others. As the global economy emerges from its recession, demand for silver is going to skyrocket three times more fast than gold. Silver is in high demand in industrial economies as well as emerging economies. Turn $200 into $100K in just 3 months with this Penny Stock Trading System. Know this shocking Dow Futures secret that can make you rich! Read the story of Richard Samuels, a post office mailman with a head injury and how he made a fortune with these Neutrino Forex Signals.
Silver can play an important role in your portfolio. Because of its precious metal status, you can use it as a hedge against inflation. Now, you can invest directly in silver by buying and selling silver coins and bars. Two popular silver coins are the Silver Maple Coins (produced by Royal Canadian Mint) and the 100 oz. Silver Bar. Silver futures contracts like the gold futures contracts give the most direct access to the silver market. The most liquid silver futures contracts are the COMEX Silver futures contracts. This is the standard silver futures contracts that get traded on the COMEX Division of NYMEX. The other is the CBOT Mini-Silver. This contract is available for electronic trading.
ETFs ( Exchange Traded Funds) have become highly popular in the last two decades. They give you the benefits of both stocks as well as mutual funds. Now, you can find many ETFs tracking a basket of commodities. You can find Gold ETFs as well as Silver ETFs. The most popular one is the iShares Silver Trust Fund that is managed by the Barclays Bank. The bank hold the silver bullions in its vault. This ETF tracks the spot price of silver. So by investing in this ETF, you can profit from the silver price volatility. However, right now there might not be many ETFs that solely track this commodity. As the demand for silver increases and its price skyrocket, you will soon find many new ETFs tracking this precious metal.
Now, if you have been trading stocks and know something about stock investing that most probably you will love to invest in a silver mining company. The problem is this that most of the mining companies mine a number of metals that might include silver. What this means is that the stock of those mining companies will not reflect the gyrations in the silver market in the true sense. Though a percentile of their stock price variation can be linked to this precious metal. What you need to do is to look for a company that exclusively mines silver. This will give you a direct exposure to the silver market.
There are a few silver mining companies worth mentioning here. One of them is the Silver Wheaton Corp. This is one of the only few companies that generates all its earnings from silver mining operations. So investing in the stocks of this company might give you the direct exposure. This is a mere suggestion. Before doing any investment, you should do a good research. This way you might unearth a hidden gem that has the potential to skyrocket. Another silver mining company is the Pan American Silver Corporation. It has silver mines located in a number of countries that include Peru, Mexico and Bolivia. Do your research, you might unearth more companies. Now a days, it is not difficult to invest in foreign stocks. You can even find a good foreign company.
Silver Wheaton focuses exclusively on mining silver. It has its operations that stretch from Mexico to Sweden. There are other silver mining companies that you can research and invest in too. So there are many possibilities for investing in silver.
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Commodities Vs Stocks-Where You Can Get A Better Return?
Jan0
Richard Dennis was a small time trader who started with only 0 and in a few years ended up making 0 million trading commodities. So, you can see the potential of trading commodities. But over the years, investors and traders have been afraid of commodities considering them to be risky. How much risky commodity trading can be? If we do a comparison with other asset classes, we find commodities to be at par with them in terms of risk. Commodities are no more riskier than stocks. But for whatever reasons, investors have always preferred stocks over commodities! Discover Chris Rowe’s Options GPS-the ultimate Stock Options Trading Course that can make you a fortune in 2010. Chris is known as a master options trader. He was already a millionaire while still in his 20s when he quit Wall Street. Read the story of Richard Samuels, a post office mailman with a head injury and how he made a fortune with these Forex Signals. Turn $200 into $100K in just 3 months with this Penny Stock Trading System.
Stock have always been the preferred method of investment for many investors and traders. As said before, statistically speaking, commodities are no more riskier than stocks. What about the return? Let’s do a comparison. Every investor knows about the famous Dow Jones Industrial Average (DJIA). DJIA is considered to a barometer of NYSE and is a price weighted average of 30 blue chip stocks. Let’s compare DJIA with another index, the Dow Jones-AIG Commodity Index. This index tracks the performance of a basket of commodities and is published by the same company that publishes the DJIA.
Let’s make a ten year comparison. DJIA had a negative return of -7% in 2002. While the Dow Jones-AIG Commodity Index had a return of 26% in 2002 alone. So what was better? Investing in commodities or investing in stocks? Now, DJIA had an average return of 7% over a period of 2002 to 2005. In the same period of 2002 to 2005, the Dow Jones-AIG Commodity Index had a return of 21%. You can now clearly see that commodities as an asset class had outperformed stocks in the last decade. But still investors feel shy of investing in commodities. This has something to do with human psychology.
Investors are afraid of what they don’t know. Many investors tend to stick with an investment that they know even if that investment doesn’t perform well for them. For example, in the recent stock market crash of 2008, investors lost trillions of dollars. In 2000, when the dot.com bubble burst, investing public lost something like Trillion. Yet, no one warns of stocks! Many investors are afraid of commodities because they don’t know much about them.
When you trade stocks, you have to have 50% of the capital in your trading account before you can enter a position on margin. In other words, a leverage of 2:1 is maximum permissible. Now margin requirements for commodity futures may vary. There are dozens of commodity futures contracts that you can trade.
Suppose, you decide to trade Soybean Futures on CBOT (Chicago Board of Trade). The margin requirement is only 4%. What this means is that with only 4% in your trading account, you can buy ,000 worth of Soybeans Futures Contracts. Now if the trade goes your way, you make a hefty profit on a very small amount.
But hey, leverage is a double edged sword that cuts both ways. If the market goes the wrong way, you can lose a lot more than your principle. Anything you do in life is risky. Even your marriage! Love can turn sour and end up in a messy divorce. But that doesn’t mean you shouldn’t love.
Commodities are going to see a many decade long boom in the first part of the 21st century. This boom is being fueled by the increasing population and it’s demand for a better living in all parts of the world. Countries in Asia, Africa and other parts of the world are developing. They need resources for their development. Commodities are the most important resource that are going to face high demand in the coming decades. Take the example of oil. Without oil, the global economy cannot run. With it’s supply dwindling and demand going up, you should expect to see crude oil reaching the 0 per barrel in this decade! So get ready for trading commodities and making a fortune in 2010 decade!
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