The stock market has bounced back again and has now recovered all of its losses in a matter of just two weeks. First the headline read “Stock markets give up all of 2014 gains”. So everyone rushed to sell – only to see the market laugh in their face as it registered the biggest gains of 2014.
Gold and silver on the other hand continue to fall. Silver is now at a five year low. So where would you put YOUR money? In a market that is at all time highs or in a market that is at all time lows?
It will come as no surprise to learn what I am doing. That’s right, I continue to sell my remaining stocks stocks at the top and buy silver and gold at the bottom.
For many this is a tough call but I know that the only way I can make money is buy buying something when it is truly hated. The principle of buying low and selling high is the only one that plays out in the long term.
Buying silver to protect my wealth
The short term the news may well be very different. Will the stock markets go higher? Yes, they probably will. Will silver fall even lower? Yes it may well do exactly that – but the short term play is far less important than the long term play. I am in the “selling phase” for stocks and I need to be all out BEFORE the crash. I am in the “buying phase” for silver. I need to be all in BEFORE prices start to rise. This takes time as you have probably learned. If I wait for the turn then I’m trying to sell when everyone else is selling and I want the exact opposite of that. I want to sell to a hungry audience and sure, let them take some gains at the start – I’m playing a longer game than that.
Each month I put the exactly same amount into physical silver (uncirculated silver Britannias that will not attract CGT here in the UK). If the price falls I get even more silver for the same amount of money. This “price averaging” means my total pot is being purchased as at near to the bottom as possible. You have to buy into the fact that you will never buy at the very bottom so you have to do the second best thing. Keep buying as close to the bottom as you can get. If it falls a bit more you just get a bit more silver on your next monthly purchase.
You will have to decide on your own strategy but whatever you do make sure you are not buying into a market that is close to its top – always go for the one that is closest to the bottom. Simply work out what your monthly, or quarter investment figure is and stay with it. When you are all in you can sit back and relax and wait for the inevitable to happen.