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Silver: What Are My Downside Risks From Here?

Silver Bullets
  • If This Is The Lower End Of The Trading Range, Should I Buy All I Can or Just Buy Some?
  • Would I Be Better Off Buying Silver or Gold?
  • What Are The Risks In The Financial Markets And Why Is Buying Physical Metal Essential?
February 25, 2013 12:56 pm est

Monday Feb 25th 2013 


I have posted a video on this website called “What are the downside risks from here” Be sure to view it, but in short the message is this:

When an investor makes a decision to buy in ANY market, there are two questions he/she needs to ask themselves. One: What is my upside potential from here, and two: and more importantly, what are my downside risks from here?

Moving to silver specifically, over the past 18 months, the low in silver has not breached $26.50 on the downside and the high in silver was $48.50. So today we are $29.25, which means that my downside risk is $2.75 and my upside potential is $19.25 to get back to the high… Those are odds any investor should be willing to take.

You see, if you “wait to see what happens” and silver goes up to say $35 your downside odds increase significantly. A “smart money investor” always buys at the lower end of the trading channel and this is the lower end.

Lets talk about the so-called “risks”. When I refer to the downside risks, I am only illustrating that maybe, just maybe, you could buy silver $2.75 cheaper than today, but that’s “if” it does go down to touch that low, it may, or it may not.

However, in my opinion silver or gold for have no risk when purchased outright in the PHYSICAL FORM. For 5,000 years it has never gone to zero, always has intrinsic value and has always been used as money and always will be used as money for 5,000 more years!

When you get into futures contracts, options or SLV trading, there are tremendous risks because they are leveraged about 100:1 and then there are margin requirements that are controlled by the CFTC that can be raised or lowered at their discretion… then you should ask your self, if I want to buy silver or gold, why would you want to buy a proxy (similar to product) with tremendous counter-party risks and the systemic risks we have in our financial markets today.

When you buy the real thing, and it is done for the reasons it should be done, such as a hedge against, a percentage of, an insurance policy, whatever you want to call it, you can relax knowing that you are properly diversified with equities and physical assets and in this uncertain financial landscape, diversity is KEY!

With that said, if you are going to diversify, wouldn’t you want to buy that instrument at the lower end of an 18 month trade range, or sit on the side to see what happens?

In closing, if you think of a sports game like football or anything else, the players on the field who are in the game are the ones making money, not the people in the stands watching the game… Get off the bleachers and join in the game!

Silver Market Update: Clive Maund – Even though the technical indications for silver are not as strongly bullish as those for gold, they are now sufficiently positive that silver is likely to take off higher before much longer, encouraged by the strength that we should soon see reappear in gold. Of course, it will probably take some weeks for sentiment to recover sufficiently to drive a significant rally after the latest sharp drop, so we may see some backing and filling before a sustainable uptrend can get going, but that is normal.

The bounce on Thursday and Friday occurred because silver has become critically oversold on its RSI, but it looks weak, and so we could see some more minor downside short-term before the current down-leg has completely run its course. Nevertheless, we are believed to be close to an important bottom here.

Read More Here

Will the Silver Market Remain Strong?

From David Morgan:

If there is only one thing to teach you about the upcoming silver bull market it is this 90% of the move comes in the last 10% of the time!

Think about that statement. Would you be happy to capture 90% of any market move? What this means is you could just now be waking up the precious metals and build your wealth even starting at what appears as— this late date.

What if the entire precious metals bull market hits the average 17 year cycle. Since gold bottomed for this cycle in 2000 it would suggest that 2017 for the top. A full four years from today. If the last year or so of this market is the most explosive and gold explodes and you are along for the big gains in the blow-off phase how would you feel?

Now is the market really going to make the majority of the move in the last year, let alone 90%? Probably not, however think about the facts you already know, look at the housing bubble the most excitement and largest gains happened going into the top, the last few months of the move. Think about the technology stocks bubble, the Japan bubble, or any other market. This simply is market behavior!

However, this time is different. Why?

Because this time it will not be about being a smart real estate investor, or understanding that technology is leading the growth cycle, or the Japanese have a more efficient system. It will be about the one word I seldom use… Fear!

Yes, you and many throughout the world will be concerned that you don’t have enough money for retirement Or concerned  that your pension will not be there? Or concerned your employer cannot meet his obligations? Concerned that the Dollar, Euro, Yen, or any government script will be worth tomorrow what it is today?

Worried that the system truly is cracking up and plans that you made based on solid evidence a decade ago are invalid and you need to take action into your own hands instead of relying on your financial planner, stock broker, defined benefit package or even the safety net provided by the governments at large.

When that shift takes place, that tipping point, when just enough people on a global basis collectively say, we are mad and we are not going to take it any more therefore we are moving into the precious metals. Once this happens look out the buying frenzy will be upon us, many have heard there is no fever like gold fever, this may be true, but bear in mind there is nothing close to a silver bull market! Silver shines the light of truth about the corrupt financial system better than gold, because more people own it!

How high can silver go?

And as we brace ourselves for the final chapter of a U.S. dollar currency crisis, silver has a long way to go.

Lets take a look at history. In 1980, as the nation was still reeling from the Carter-era inflation and investors were buying up precious metals, silver peaked at $52 an ounce. Adjusted for inflation, that’s about $143 today!

Those who get in now will be richly rewarded and can get a lot more for their money.