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Article: Seeking Alpha: Anatomy of Silver Manipulation - How Low Can It Go?
If this sort of market activity bothers people, there is a pretty easy way to avoid it - take possession. Get yourself a safe deposit box and own physical bullion.
It's not unlike the action on a bond fund when rates are rising - the value of the bonds decrease because they must be sold at a discount. THIS IS NOT TRUE IF YOU BUY AND HOLD INDIVIDUAL BONDS UNTIL TERM. You may lose the opportunity cost on the margin of the increased interest rates but you will not lose value of the bond.
So, if you take possession of physical, the value remains at standstill?
I guess it is the same mentality that some try their to justify losses by saying its not a loss until sold.
The price may or may not come to the old level or even make take a )long time. If you had bought gold and silver at previous peaks how many years did it take to recover? It did not matter if you had physical or otherwise. If you had to sell, you would pay the ongoing rate and more for the physical because of absurd dealer commissions to facilitate the sale.
If you were to sell your physical metal during that time you will get whatever market prices (plus a heft commission from dealers). While you are holding a dead asset, you could be making money in something else.
In the end physical metal needs to be sold to buy something else. I would rather make this as cheaply as possible if I am going to be in this trade. The only thing physical allows you to prevent from rash buy/sell decisions and psychological satisfaction of fondling it (as Warren Buffet puts it.
Comments
Good stuff as usual.
If this sort of market activity bothers people, there is a pretty easy way to avoid it - take possession. Get yourself a safe deposit box and own physical bullion.
It's not unlike the action on a bond fund when rates are rising - the value of the bonds decrease because they must be sold at a discount. THIS IS NOT TRUE IF YOU BUY AND HOLD INDIVIDUAL BONDS UNTIL TERM. You may lose the opportunity cost on the margin of the increased interest rates but you will not lose value of the bond.
peace,
rono
I guess it is the same mentality that some try their to justify losses by saying its not a loss until sold.
The price may or may not come to the old level or even make take a )long time. If you had bought gold and silver at previous peaks how many years did it take to recover? It did not matter if you had physical or otherwise. If you had to sell, you would pay the ongoing rate and more for the physical because of absurd dealer commissions to facilitate the sale.
If you were to sell your physical metal during that time you will get whatever market prices (plus a heft commission from dealers). While you are holding a dead asset, you could be making money in something else.
In the end physical metal needs to be sold to buy something else. I would rather make this as cheaply as possible if I am going to be in this trade. The only thing physical allows you to prevent from rash buy/sell decisions and psychological satisfaction of fondling it (as Warren Buffet puts it.