What to Do?
Prime Junior Silver Miners ETF
Long Time readers Know we have been bullish on Silver and gold since June of 2015. That is when the miners were valued at the lowest price Vs the physical metals ever. “Too Cheap”, is what we said at the time. Since then we have had some amazing rallies and some breathtaking corrections, but always working in an upward direction. It is not ending any time soon. The 2020 chart above is easy to read. A 50% decline in less than four weeks in March a really nice rally to August 1 and a correction until now. What to do?
First the bigger picture Silver has years to run. This is simple supply and demand. Silver production has been declining for six or more years and demand, driven by alternative energy requirements (solar), use in electronics and electrification of the auto industry, is expanding. Annual demand has been bigger that annual production for four years.
You are under invested and want to participate. We suggest looking at the Miners.
The Fund above, SILJ has many smaller miners but the also hold some of the biggest Silver miner in the world. The industry is so small (upside price leverage) that you simply cannot create a fund or ETF of small silver miners without including some of the big ones! That is great for investors because you get the benefits of both in a silver bull market run. The big companies usually lead in the beginning but later in the cycle the little companies explode higher. That is what we find attractive about SILJ.
Look for weakness in buying but dollar cost average into a position. At least three equal dollar purchases over the next month with price weakness as a buying opportunity.
What is the end point of the silver bull market? We peg the beginning of this silver bull market in late 2015. We believe we have another ten years to run as the electrification of auto industry and alternative industry are in their early days. In addition, the Federal government is deflating the US Dollar to pay back our national debt with cheaper dollars. That is the second reason to own silver – and gold. Money managers around the world are under invested in Gold and silver. That is additional demand for precious metals. Protect your purchasing power! We like the industrial demand for silver as our first choice reason between gold and silver but make no mistake, we are gold bulls at this time as well.
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Have a great day! Tom
Where Value meets Buy Signals!
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* An account related to LOTM holds a position in this security.
Neither LOTM nor Tom Linzmeier is a Registered Investment Advisor.
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