Most silver investors hesitate to pull the trigger until fundamental conditions prove “ideal.” Or do they? “Ideal” conditions don’t just come and go like fleeting short-term opportunities. They typically last for months. Yet many silver investors somehow fail to recognize them.
So why aren’t investors jumping at the opportunity to buy as soon as the first green light flashes? It’s because investors start overthinking the ideal “price level” to begin buying.
When prices decline steeply, many buyers begin doubting the bullish fundamentals when they should be looking to buy at discounted levels.
When prices begin to rise, many buyers think that perhaps they missed their opportunity, fearful that prices are about to peak (hint: markets always climb a “wall of worry” and go much higher than most investors think).
No wonder most investors always miss the boat!
Let’s take a look at three investor attitudes toward silver. Bear in mind that commodities never go to zero value. In the case of silver, where industrial and monetary demand virtually guarantees rising value over the long-term, concerns of buying at too low or too high a level are meaningless. And due to shrinking supply, silver can only go in one direction from the current levels…and that is upward.
Buying the Bleak
A sharp drop in the price of an asset that is short in supply and has both long-term industrial and monetary demand makes for a favorable buying opportunity.
When silver tested and dipped below the $14.00/oz range last September and November, only the investors with a long-term vision and a clear understanding of the supply and demand conditions were the ones who likely scooped up the metal realizing the rare buying opportunity that presented itself.
As we’ve been giving the signal to buy during this multi-month decline, we hope that you too were able to load up on silver as the metal rallied over $16/oz, which, in our estimates, is still a low price from a long-term perspective. At its current level within the $15/oz range, silver is still a strategically-favorable buy.
Buying the Peak
Buying at a relatively high point is tricky. Most investors fear they may be buying the top of the market when in most cases they’re buying tomorrow’s lows. At the time of writing, spot silver is at $15.46/oz. Many investors will look at last November’s $14.00/oz price and think they missed out on the move.
Yes, you may have missed out on the last three months’ move, but based on the long-term fundamental forecast $15.46 may be the “lows” in the following months. The skilled investor will buy at pullbacks and new highs just as long as the fundamental conditions seem favorable. And currently, fundamentals are still giving us a green light.
If you buy more silver when prices sink and buy less when prices rise, then you lower your average cost over time. After all, we’re not speculating on short-term price movements. We’re not day trading. We’re consistently looking to buy sound money at the most favorable prices we can find. And with silver’s most recent pullback from the $16.00 levels, we see the current price as a relative discount to where it will be in the coming months.
Above-Average Investors Dollar-Cost-Average Their Investments
Sharp investors dollar-cost average. Seeking to get in at the lowest price possible, savvy precious metals investors aren’t aiming to unload at the next market high, but instead, are looking to accumulate as much as possible for longer-term appreciation and safe haven protection.
Apparently, central banks are doing the same, as they’ve been accelerating their precious metals accumulations since 2010.
At GSI Exchange, we set our sights on the long-term horizon. As has been the case throughout history, gold and silver are always at the center of a paradigm shift in money.
They are the only “constants” in an ever-shifting landscape of historical currencies.
Based on our fundamental assessment, we believe that the price of silver will be three times the current price.
Silver is still way too undervalued with regard to real supply and demand. So, any drop in the price of silver presents an opportunity to buy as much as possible at discount levels.
If you didn’t buy silver at near the $14.00/oz levels, you may be asking yourself, “why didn’t I buy then when it was clear that prices were too low?”.
We told you then and we’re telling you now: prices are still too low.
You ask when might be the perfect time to buy silver. The time is NOW. Before prices surge.
Remember, you are not buying a speculative asset. You are buying sound money.