I’ll spare the diatribe and summarize by saying, the moment you hear of people that simply cannot afford to invest buying a particular asset and doing so in a large number, it’s time to reconsider your exposure.
2018, I made silver recommendations as part of the portfolio‘s hedge against inflation. I got push back - “what inflation?”.
my rebuttal was and has always been that we don’t invest solely based on what’s experienced but what we can reasonably conclude. inflation would show up somewhere just as surely as the sun rises. rates were near zero, and I think a good lot of the crowd in here felt the same.
right around the time silver crossed the $40 range, I saw a spiked and sudden interest in buying/investing in silver. it seemed to be all the rage. many of my clients had the disposable cash to hold a position. For them, it was fine. but for the rest of the bunch, the conversation forced me to ask for a thesis and a goal. To what end will you invest in silver? where are you hoping to see it? why suddenly now?
Mind you, our monetary policy and debt expansion is not anywhere near the free-and-easy regime we saw between ‘18 and ‘21. But the lay person rarely makes those comparative inferences on their own. They watch what others do, see the price run up, catch a few buzzword laden videos on YouTube and it’s ‘all systems go’.
My post here is an invitation to consider the demographics of people buying silver because their weak investment philosophy ends up being reflective in the price.
could silver move to $100/oz? surely.
could also reach $1,000.
my ask of anyone is to see that there is some symmetry in how probabilities present themselves. if theres a case for $100, then there’s also a case for $50.
the question is what would it mean to you if your certainty is certainly wrong? what would that loss do to your time horizon? the new concept of stomaching loss is to extend the holding period and wait things out. this is also costly. opportunity cost should be part of your pricing analysis and investment thesis.
Having said all that, I love silver. It was the largest piece of the pie for me at one time. But God forbid you begin to do financially better and your income improves with wisdom: your headwind becomes taxation and reinventing a scenario where silver makes sense in your portfolio.
Taxes on silver gains, unlike cap gains on stocks, are inescapable. The reason that may matter more for some is because of the amount of relative exposure. How much of your wealth extracted from your portfolio do you want to be a check made payable to the IRS? and does 28% sound like a fun haircut to get?
Beware of the layperson taking the charge of a bull run.
Understand it takes 4 corners to make a room. 3 if you’re weird. Point being, it takes more angles to house a decision.