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Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Silver 2014 - A Great Buy Opportunity!

Commodities / Gold and Silver Stocks 2014 Jan 13, 2014 - 08:52 AM GMT

By: Peter_Zihlmann

Commodities

Silver: the Indispensable Element

Silver has innumerable applications in art, science, industry and beyond.

At the highest level, though, demand for silver breaks down into three important categories:

• silver in industry,
• investment, and
• silver jewelry & décor.


Together, these three areas represent more than 95 % of annual silver demand. In 2010, 487.4 million ounces of silver were used for industrial applications, while over 167.0 million ounces of silver were committed to silver jewelry and 101.3 million ounces were used in coins and medals.

With unique properties including its strength, malleability and ductility, its electrical and thermal conductivity, its sensitivity to and high reflectance of light and the ability to endure extreme temperature ranges, it is an element without substitution.

1980 to 2014: From bear to bull


The bull market of the silver price started towards the end of 2001. On the way from $ 4.02 to the recent intraday all-time high of $ 48.42 (an increase of 1,104%), several significant corrections took place, the most severe one in 2008 when the silver price sank by 57% only to jump 441% to a new all-time high.

The silver price is in an oversold position, as shown above, which is far worse than in 2008 or in 2001. Such extremes have always been followed by strong movements to the up-side. After 2008, silver rose more than 400% while some gold and silver shares jumped 2,800% (First Majestic Silver).

What the PMO Indicator shown above clearly demonstrates: extremes will always be corrected. In fact, we had great sell opportunities in 2006, 2008 and 2011. On the reverse side, 2001 and 2008 were unique buying opportunities.

At present, we again have such a buying opportunity! This is not the time to stay on the side-lines. You have to buy now!

Should you rather buy gold or silver shares instead of gold or silver?

First, there are a few basic facts that one has to know:

1. Gold and silver stocks are more volatile than gold or silver.
2. It is hard work to select the right companies and to monitor them.
3. You should know the Management.
4. You should have a long-term view.

As most do not have the time to devote several hours a day
• to employ a bottom-up selection process and fundamental, proprietary research to identify companies that are considered undervalued, based on growth potential and the assessment of the company’s relative value, and
• to seek exposure to overlooked and undervalued gold stocks across the world,

this work is best left to an experienced fund manager. The following chart reveals the risk and rewards of such investment:

The best silver shares:


Investment Policies

The Fund will seek to achieve its investment objective by investing at least eighty-five per cent (85%) of its assets in securities, issued by junior precious metal exploration, development and production companies operating in Latin American. The remaining fifteen per cent (15%) of the Fund’s assets may be invested in securities issued by gold and silver exploration, mining and production companies listed on a stock exchange anywhere in the world.

Mexico, as one of the most prolific mining countries of the world, will be one of the main targets of investment where not less than forty per cent (40%) of the Fund’s assets will be invested.

Capital gains may also be achieved by investing up to twenty-five per cent (25%) of the assets of the Fund in Private Placements of listed companies provided that the shares will be freely tradable within six (6) months from the date of placement.

By Peter Zihlmann

www.pzim.com
invest@pzim
phone +41 44 268 51 10
mobile +41 79 379 51 57

THE TIMELESS PRECIOUS METAL FUND is a shareholder in the company and will benefit from any increase in the company's share price.

How to invest: http://www.timeless-funds.com/en/timeless-precious-metal-how-invest

Disclosure: The author has not been paid to write this article, nor has he received any other inducement to do so.

Disclaimer: The author's objective in writing this article is to invoke an interest on the part of potential investors in this stock to the point where they are encouraged to conduct their own further diligent research. Neither the information nor the opinions expressed should be construed as a solicitation to buy or sell this stock.

Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions in the stock - or to use their own brains.

In our opinion, the best approach is to buy a diversified portfolio of stocks as represented in THE TIMELESS PRECIOUS METAL FUND or THE SIERRA MADRE GOLD & SILVER VENTURE CAPITAL FUND instead of shares of only a small number of companies.

Peter Zihlmann Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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