Friday, May 6, 2011

Silver market fear

I was hesitant to jump into the silver debates. Silver is right up there with religion and politics. It may start out reasonable and polite but it usually degrades into an emotional flame fest.
In the end however... the silver market is a prime example of what sort of things that the newcomer to the markets might encounter...

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

Emotion. It will make or break an account and do so quickly.
Right now what is happening in the silver market is people that were emotionally motivated to get into silver are being testing in a way they werent ready for.
Maybe they were afraid that dollar will lose its value. Maybe they are tired of losing money in the stock market with their company 401ks. Those are valid concerns that need to be addressed to be sure, but not enough reason by themselves to go buy silver. There is more to investing in silver then avoiding fear of losing things. Because as I say in the video... you get into a position based upon emotion then you are going to be getting out of it based on emotion.

Here is a screenshot of SLV this morning before the markets opened that I talk about in the video.

At the time of this blog entry SLV is up 4%. It may be reversing and going back up. How is the person who panic sold going to feel if it goes all the way back up?
It may be momentarily pausing and next week continue to plummet. How is the person who is too afraid to sell and take their loss going to feel when it goes down?

Now as for silver as an investment... I'm making no predictions on what is going to happen next up or down. If it goes down low enough that I feel it's a good investment with a risk vs reward ratio that works for me the I will buy. If it doesnt I wont.

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