How Not to Purchase Silver
Quick note for you. Sorry I’ve been away, but it’s the last week before school starts and I wanted to spend a little extra time with the family before things get crazy again.
I recently wrote an article that will soon be posted on the Freedom Bunker website that talks about my brother’s interest in making his first precious metals purchase. There’s nothing new or revolutionary about the information in the article – there’s nothing in it that isn’t posted at least a couple of times around this site, but as you know, my goal is to assist others in acquainting themselves with these markets. I wanted to post a little extra something on my brother’s experience as a reminder to you about how not to purchase silver.
My brother’s in a bit of a rush to make this purchase. He’s excited about the new venture, and he sees that prices are starting to pop a little bit. Right there is a state of mind that we need to be aware of. Whenever we find ourselves thinking that we’re going to be missing out on something and we believe we need to act quickly, we get distracted and our thinking gets unclear. As I’ve written several times already, we never want to chase price in these markets. We never need to because they’ll come back to us… almost always. My brother is not a trader. He wanted to make his purchase and hold it for a while. He holds no silver or gold right now, and he’s not going to worry about purchasing at the exact bottom. Even though we’ve had a nice rise off of the June bottoms, I think we’re close enough to them to establish an opening position. He’s got about $10,000 to invest. I’m not an “all in” kind of guy, so if it was me, I might do half now and wait for the next correction. That next correction, though, could come $50 higher, maybe much higher. We could see price blast off. That’s the greatest danger in a bull market such as this – being out of it when price takes off. Take a look at the left side of the price chart below. If we had waited for the pullback in 2010-11, we’d have missed out on a $30 move – ouch.
As I mentioned in my Cheap Gold article (when gold was cheaper!), as soon as you make your purchase, the price is going to drop anyway. There’s some sort of metaphysical law at work here. I’m just kidding, of course, but it seems like that’s the way it often happens. The bottom line is that though we never want to buy into price rises, I think now is still a good time to get your feet wet here. There’s more to this story though…
Wheelers & Dealers
I just got off the phone with my brother. During our last conversation, I recommended that he do some online research and find some local dealers near him. I suggested that he check prices and reviews for several dealers, and that’s just what he did. He’s a Glen Beck fan, and if you follow Mr. Beck, you know that Goldline is one of his advertisers. Just for kicks, my brother gave Goldline a call and here is what happened:
My brother described the Goldline representative as “a used car salesman;” fast talking, fast moving, ambiguous and dubious. He was quoting 1 ounce gold bars/coins in the $1600 range (that’s $200 above current spot!), he was attempting to sign my brother up for an account (not sure what for) and he told my brother to FedEx his check the next morning in order to take advantage of the excellent offer. This is classic. This is very similar to what happens when these companies call you with these “unbelievable” offers. You never want to do business like this. You need to know current prices for the items that you’re interested in purchasing and you never want to be rushed into signing or sending anything. You want to be able to look over any agreements. If anyone is trying to convince you that you need to do it “right now,” it’s because they are a salesperson who knows that their best chance for making the sale is “right now.” These guys and gals are experts at what they do and they’ll have you standing on your head if you’re not careful. They prey on the uninformed and the meek. Fortunately, my brother is neither. He got caught up in the sales pitch, though. He stated that before he knew it, he bought some gold that was too high in price and that he didn’t really want. He did not send them a check though and does not plan to. He is expecting some nasty phone calls from them because of it. I’ll let you know what happens.
We don’t have to get into situations like this. There is too much information available to us. We can prepare ourselves to make wise and timely purchases.
So silver and gold are continuing their beautiful moves. We’ve got a nice little rhino horn forming on the weekly chart, but that horn could grow longer and higher… or not. There are dozens of sites offering multiples of forecasts out there. Block out the noise and keep stacking. More soon. J.