Subscribe for 12 months with recurring billing - $199

Buy 12 months of subscription time - $199

 

Search Silver Prices
Silver Price
[Most Recent Quotes from www.kitco.com] Our RSS Feed

Silver Updates by Mail

Enter your email address:

Follow Us on Twitter
« Europe's poignant wake-up call | Main | Eric Sprott and Rick Rule Skewer the U.S. with James West on Midas Letter Money »
Wednesday
Apr042012

Where (and When) to Place Your Investment Bets?

 

By Jeff Clark, Casey Research

Let's explore the advantages of saving in gold and silver over dollars. Here's a hypothetical look at what could occur over the remainder of this decade.

The charts below compare saving $100/month in gold and silver vs. an interest-bearing money-market account. For our projections, we assumed gold's average annual gain of 18% since 2001 will continue through 2020. For the money-market account, we used an annual interest rate of 1% in 2012 and added 0.5% each year, so that by 2020 it's earning 5%.

Here's what would transpire by 2020:

If you invested $100/month from January 2012 through December 2020, your total contributions would amount to $10,800. In the money-market account, your savings would compound to $12,959.48, for a gain of 20%. For gold, however, the value of the metal would reach $27,025, for a return of 150.2%.

For silver, we'll assume it matches its 25.3% average annual gain from the last ten years through 2020. Here's how it would stack up against money saved in a money market account.

The money-market account would again gain 20%, but the value of silver would reach $39,302, for a total return of 263.9%.

[We caution against investing more money in silver than gold; the metal is much more volatile, and has large industrial applications that could hinder the price in a poor economy. And if fear is high, gold will be sought before silver.]

As you consider these data, keep in mind the power of dollar-cost averaging. Using this strategy to accumulate gold and silver will lower your cost basis automatically because you'll buy more ounces when prices are low and less when they're high. And that highlights another gain: Buying systematically removes emotion from the equation. "Buy on dips" is good advice, but it doesn't tell you exactly when to buy. A commitment to dollar-cost averaging eliminates that question.

You may argue that interest rates will be higher later this decade, and you'll probably be right – but we offset that likelihood by excluding any mania in precious metals. Also, taxes must be considered, as rates are higher on capital gains for gold and silver than for passive income, yet you'd still be left with a much greater return.

At the risk of repeating ourselves, at this point, with the monetary and fiscal predicaments confronting many of the world's governments, and the probable responses they will employ, we recommend a good chunk of your savings be held in gold and silver.

Is There a Best Time of the Month to Buy Gold and Silver?

If you're going to dollar-cost average your purchases, it might be useful to know if there are days of the month that are better to buy than others.

We measured the performance of both gold and silver for each day of the month from 2001 through 2011, and then calculated the average daily return.

Here's what we found for gold.

Clearly, the 13th, 15th, and 23rd are ideal days to buy since the price tends to be the weakest.

Here are the data for silver.

The 13th and 15th again stick out as good days to buy.

If you're accumulating on a weekly basis, we found Tuesday is the weakest and thus a good time to buy (as well as Friday for silver).

A few things to consider if you decide to use this information:

  • The figures are averages, so there are days when prices bucked the trend. View these results as tendencies, not certainties.

  • These days might fall on weekends or holidays and so won't be available every month.

  • The calculations use daily closing prices, which would be almost impossible for an investor to match.

  • The results measure past performance and can't predict the future (though we see no reason for a significant shift).

That said, if you arrange to buy gold on the 13th and silver on the 15th of each month – or on Tuesday for either metal if buying weekly – your cumulative gains stand a statistically greater probability of being slightly higher. Again, your mileage may vary.

[Jeff Clark and Louis James, both on Casey Research's metals team, do their best to wring actionable ideas out of every possible bit of information they find regarding precious-metals investments. And now you have an unprecedented opportunity to hear them discuss their ideas and maybe even answer your question. Learn more, then act fast – you must sign up by midnight EDT on Friday, April 6.]

Regarding www.skoptionstrading.com. In 2011 we outperformed

Gold by 31%,

Silver by 41%,

S&P by 42%

HUI by 53%.

Our model portfolio is up 445.53% since inception

An annualized return of 91.38%

Average return per trade of 36.17%

97 completed trades, 88 closed at a profit

A success rate of 90.72%

There will be a price increase on the Sunday 8th April 2012, so if you thinking of joining a winning team, do it now and lock in a low price, there are only TWO days remaining to take advantage of this offer.

The new fee structure is as follows:

$199.00 will be increased to $499.00 for 6 months

$349.00 will be increased to $799.00 for 12 months

We encourage you to do the due diligence and also to compare us with other services in order to satisfy yourself that this is indeed the right service for you.

Existing Subscribers should note that this increase will not apply to them and will only apply to new subscribers and that all of our current subscribers will continue to subscribe at the rate that they signed up for originally. So those who joined us when the subscription fee was $99.00 will continue to pay that very same $99.00. We hold rates for our existing subscribers as a reward to them for their loyalty to us, which we very much appreciate.

Also many thanks to those of you who have already joined us and for the very kind words that you sent us regarding the service so far, we hope that we can continue to put a smile on your faces.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. Winners of the GoldDrivers Stock Picking Competition 2007  

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our  Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here. 

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>