12 April 2011

When to STOP Buying Silver

Silver has been all the rage for many years now. Gold is great as a hedge, but silver has been a shining beacon because it’s still undervalued. In his post ‘Why Should I Buy Silver Now', Hameed highlights these points in depth and encourages us to get involved to benefit from the bull run that is likely to last for a while yet, and I agree. If that isn't enough to convince you, you could even seek out an experts opinion

So obviously nothing can really go wrong and we should all dive in right?


Gold and Silver are fantastic, but not understanding some of the reasons why its doing well will quickly turn your profits into losses!

So, when should you NOT buy silver?

Read on…

Whilst silver can be traded, most people use it to 1. Protect the value of their hard earned cash and 2. Increase the value of their hard earned cash. With this in mind, understanding some reasons why silver rises and falls helps to maintain and increase the value of your cash. Since money is ‘currency’ [motion/flow], we must always be looking for places to move it to. Here are just a couple of things you can look out for so that you can sell silver and get you money moving again at the right time!   

When QE stops taking place

The fancy word for the abbreviation QE is Quantitative easing. We’ve all heard the news, where governments make the decision to print more money in order to try and solve a problem that is caused by the same money their printing!?!?

This decreases how much our paper cash is worth whilst the value of Real money [Gold/Silver] skyrockets. When the governments STOP printing money however, its time to start considering whether you should cash in a chunk of your precious metals investment and temporarily stop buying them.

When interest rates start to rise

Right now, interest rates are very low. This is great for property investors, because they can secure loans at cheaper rates and benefit from the increased monthly profit it brings. This is also excellent for metals, because they thrive when interest rates are low.

BUT, when that interest rate starts creeping up, its time to start converting some of those metals into cash!

If I convert to cash, what should I do with it

2 ideas of what to do with your converted commodities come to mind:-

1. To protect the value of your cash, one option may be to put the cash into an account that offers a decent interest rate and grows tax free. They may lock you in for a year or so, but at least the money increases and the tax man can’t get his grubby hands on it!

2. Depending on how much money you have invested, why not use some of this cash to put a deposit on an investment property? This definitely increases wealth, with money in coming in every single month. When the pendulum swings again, a portion of your paper money can then be thrown back into commodities.

It doesn’t seem likely that the printing of money will stop soon, but at least we know what to do to outsmart them in all cases and continue to increase our wealth! And for those who want to get a brief primer on getting started, find out how to get started in buying silver

I’d love to know your thoughts, are there any other strategies you use to maintain and increase the value of your cash? Let me know below. Dont forget to sign up to FREE updates via email!

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