Swapped a good chunk of my gold for silver yesterday

[Original_Intent]

So far I am feeling like a genius!

 

[AmericasLastHope]

The more I've been reading about the gold vs. silver ratio and the silver supply/demand/shortage issue, the more I've been contemplating swapping some (or all) of my gold for silver.

However, my gut tells me not to put all my eggs in one basket, and I believe Jim Rogers recently said "hold gold, buy silver." But part of me just wants to go all-in on silver. I almost feel like I can't lose, plus more and more people are paying attention to gold, but I feel like hardly anyone is watching silver. It just feels like silver is the investment of a lifetime. Then again investments shouldn't be made based on emotion.

Ultimately, I think in a hyperinflationary scenario both metals will do well. I originally bought gold to swap for real estate, and silver to trade for goods. I guess the other issue with going all-in on silver is storage issues.

Thoughts?

 

[constituent]

gut feeling? i think they're both riding for a fall. maybe it's just me.

 

[Uriel999]

They may both fall, and actually I don't think many would complain if it did cause then we can buy more for when it goes up. I honestly see silver and gold as a great way to start planning my retirement. I don't have the money to start an IRA or Roth IRA but I can buy a few ounces of silver a month.

 

[Jordan]

They may both fall, and actually I don't think many would complain if it did cause then we can buy more for when it goes up. I honestly see silver and gold as a great way to start planning my retirement. I don't have the money to start an IRA or Roth IRA but I can buy a few ounces of silver a month.

http://www.sharebuilder.com/

 

[Original_Intent]

The more I've been reading about the gold vs. silver ratio and the silver supply/demand/shortage issue, the more I've been contemplating swapping some (or all) of my gold for silver.

However, my gut tells me not to put all my eggs in one basket, and I believe Jim Rogers recently said "hold gold, buy silver." But part of me just wants to go all-in on silver. I almost feel like I can't lose, plus more and more people are paying attention to gold, but I feel like hardly anyone is watching silver. It just feels like silver is the investment of a lifetime. Then again investments shouldn't be made based on emotion.

Ultimately, I think in a hyperinflationary scenario both metals will do well. I originally bought gold to swap for real estate, and silver to trade for goods. I guess the other issue with going all-in on silver is storage issues.

Thoughts?

I moved 20% of my gold to silver yesterday. I don't want to put all of my eggs in one basket either. I even try to have a few spare FRNs handy for a rainy day! (But I am much heavier on the money that has some weight to it! )

 

[tmosley]

JPM may be closing out their shorts in silver, so now is probably a good time to be in silver.

Alternatively, some "cash" should be kept on the sidelines at this point, because there is no guarantee these guys won't go for broke with one more massive downward push. You might see $15 silver, or even lower. It's a gamble, but I, too, am selling some gold today, and I am going to hold the FRN's until the end of July or until I see a solid entry point.

The amount of gold I am selling is puny compared with my silver holdings. I am also getting rid of the last of my large bars, which I dislike holding due to the ease with which they can be debased by unscrupulous sellers. 1oz rounds and bars have a nice ring that can't be faked cheaply.

 

[jclay2]

The volatility in the markets right now signals a very shaky foundation. I really do think the chance for a crash and/or a significant leg down in the next year has increased significantly.

 

[tmosley]

The volatility in the markets right now signals a very shaky foundation. I really do think the chance for a crash and/or a significant leg down in the next year has increased significantly.

lol, what's shaky? PM's, or the paper they use to measure them?

 

[Southron]

For those of you who are holding PM for the long term what is your Cash/Gold/Silver ratio in percentages?

I'm trying to figure out how much cash on hand to keep compared to my PM.

 

[The Freethinker]

For those of you who are holding PM for the long term what is your Cash/Gold/Silver ratio in percentages?

I'm trying to figure out how much cash on hand to keep compared to my PM.

I'm working to a goal where 1/3 of my assets are PMs.

of course, were I to close my retirement accounts and take the leftover cash, it'd be a different story.

 

[pacelli]

The volatility in the markets right now signals a very shaky foundation. I really do think the chance for a crash and/or a significant leg down in the next year has increased significantly.

The only think shaky about the precious metal markets is the fact that their value is being constantly re-assessed in reference to a shaky dollar.

 

[Original_Intent]

For those of you who are holding PM for the long term what is your Cash/Gold/Silver ratio in percentages?

I'm trying to figure out how much cash on hand to keep compared to my PM.

I try to go 100 oz. silver to 1 oz of gold.

I TRY to keep 10% of the total FRN value of the above in an emergency fund that I do not keep in the bank. (I don;t keep it under my mattress, neither!) But this fund goes up and down a lot as I use it to cover emergency expenses to avoid debt.

Right now PMS are about 40% of my portfolio, and I won't sell other holdings to buy PMs at this time, but I am definitely working on accumulating PMs as opposed to anything else, my current target is probably to be about 50% in PMs.

 

[Zippyjuan]

Qustion- if you include the costs of the transactions (the conversion of the gold to silver), how much will the price of silver have to go up before you hit break even?

 

[Original_Intent]

Qustion- if you include the costs of the transactions (the conversion of the gold to silver), how much will the price of silver have to go up before you hit break even?

Based on the amount I traded, silver would have to hit 19.20 an ounce to break even as opposed to if I had just cashed out.

However, if gold drops, then I can be "better off" for the trade at a lower silver price - depending on golds drop and assuming silver either goes up, holds steady or drops slower. If both metals go down, silver will likely go down faster, and I would be screwed.

 

[Zippyjuan]

Just asking because trading back and forth increases your cost which inturn lowers your return on your investment. I don't follow the metal markets much but would guess that gold and silver tend to move pretty similarly over the long term so unless you were trying to take advantage of a short term gain, it would seem to me to not be a great idea to jump from one precious metal to another. Just my thoughts.

Thank you for sharing the information.

 

[Original_Intent]

Just asking because trading back and forth increases your cost which inturn lowers your return on your investment. I don't follow the metal markets much but would guess that gold and silver tend to move pretty similarly over the long term so unless you were trying to take advantage of a short term gain, it would seem to me to not be a great idea to jump from one precious metal to another. Just my thoughts.

Thank you for sharing the information.

Actually, gold and silver ratios have fluctuated to as low as 10 silver: 1 gold (or less) and as high as 80 silver: 1 gold (or more)....I don't swap back and forth this is the first trade I have ever done between the two, actually - but they definitely do not track each other, silver is much more volatile than gold.

 

[Zippyjuan]

Intersting to know that they can vary relative to each other that much.

 

[Original_Intent]

Here is a table of the ratio from year to year, 1970-present
(edit: I mean to 2007)
Year Gold A.M.$ Gold P.M.$ Gold Mean $ Silver $ Ratio
1970 35.9635 35.9501 35.9568 1.765749 20.36
1971 38.275 38.15 38.2125 1.537 24.86
1972 58.1739 58.3793 58.2766 1.676897 34.75
1973 97.1174 97.3157 97.21655 2.54571 38.19
1974 158.7636 158.846 158.8048 4.671508 33.99
1975 160.8659 160.8775 160.8717 4.425634 36.35
1976 124.8018 124.772 124.7869 4.353227 28.67
1977 147.8382 147.7927 147.8155 4.63519 31.89
1978 193.574 193.4437 193.5089 5.421766 35.69
1979 307.0087 304.6824 305.8456 11.06791 27.63
1980 614.7526 614.499 614.6258 20.98365 29.29
1981 459.1633 459.26 459.2117 10.48694 43.79
1982 375.9657 375.3046 375.6352 7.920352 47.43
1983 423.7073 423.6636 423.6855 11.4301 37.07
1984 360.6547 360.7843 360.7195 8.144603 44.29
1985 317.4245 317.2952 317.3599 6.131872 51.76
1986 368.198 367.855 368.0265 5.46452 67.35
1987 446.8368 446.2237 446.5303 7.015613 63.65
1988 436.7844 436.8582 436.8213 6.532437 66.87
1989 381.2679 380.8202 381.0441 5.499895 69.28
1990 383.7326 383.5645 383.6486 4.831589 79.40
1991 362.3411 362.257 362.2991 4.056609 89.31
1992 343.8687 343.9492 343.909 3.946437 87.14
1993 360.0474 359.8151 359.9313 4.31301 83.45
1994 384.0504 384.0601 384.0553 5.285133 72.67
1995 384.0706 384.0532 384.0619 5.197062 73.90
1996 387.7348 387.8679 387.8014 5.199453 74.59
1997 330.9968 331.2948 331.1458 4.897241 67.62
1998 294.1223 294.0871 294.1047 5.539794 53.09
1999 278.8627 261.6342 270.2485 5.218407 51.79
2000 279.2897 279.102 279.1959 4.95253 56.37
2001 271.1901 271.0359 271.113 4.370217 62.04
2002 310.076 309.6772 309.8766 4.599006 67.38
2003 363.8316 363.3209 363.5763 4.878686 74.52
2004 409.5323 409.1663 409.3493 6.657825 61.48
2005 444.9879 444.447 444.7175 7.311538 60.82
2006 604.3379 603.7722 604.0551 11.54918 52.30
2007 696.4312253 695.3865 695.9088 13.38354 52.00
Min 35.9635 35.9501 35.9568 1.537 20.36
Max 696.4312253 695.3865 695.9088 20.98365 89.31
Mean 326.2274033 325.5596 325.8935 6.260469 54.03

Meh, that did not format very well. Just be aware that the last number in each row is that year's ratio. As you can see from the bottom, even in just the last forty years it has varied from 20.36 minimum to 89.31 maximum. Over the history of the world the average is more like 16 to 1, as that is about the same ratio that they are taken out of the ground at. So I was just feeling that gold is overvalued in relation to silver which is why I did the trade.

 

[Jeez]

How do you guys manage your PM portfolio? hard assets bullions, coins, etfs?