The Gold & Silver Industry is buffeted by both seasonal and business cycles. However, there has never been any durable reversal of values in this bastion of the economy. This industry has gained about 50% in market capitalization over the last five years. It has also hovered between 0% and 100% appreciation during this period. The overall performance is far above the S&P 500 for the last five years. The industry should find a significant place in every portfolio of today.
Each metal requires specialized knowledge. Implications of daily price fluctuations are rarely understood. Many people should not trade in Gold & Silver Industry stocks for immediate gains: it is an excellent parking slot for funds that can wait for years to gradually add value. The intrinsic demands for these two metals can never fade. Vast new reserves on earth are unlikely to be found. No other facts should confuse investing strategies for stocks from this industry.
Silver prices are infamous for crashing every summer. Neither demand nor production vary significantly during any part of a year, so seasonal price fluctuations must emanate from coordinated actions by groups of players. Technical analysis helps to find the best entry points for stocks from this part of the economy. Silver has already lost about a fifth of its value in the four months ended July 2008. Price movements during the last quarter of 2007 suggest that August 2008 could be opportune to buy Gold & Silver Industry stocks.
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