Category Archives: Investing

Is Now A Good Time To Invest In Silver?

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If you’ve been waiting on the sidelines to invest in silver you may be thinking that perhaps you missed the boat and the best time to invest in 2012 has passed. The price of silver has risen significantly since the start of 2012 and you’re probably kicking yourself if you didn’t invest at the start of the year. But many analysts still think there are significant gains to be made investing in the white metal.

David Morgan, publisher of Silver Investor still thinks that silver will rise above $50 per oz in 2012. There is also a chance that it may reach $65/$70 per oz before the end of 2012. So silver may still be a very good investment for 2012. The demand for this precious metal is expected to rise sharply as manufacturing begins to ramp up, especially in eastern countries like China. That can only push up the price further. Combine that with investors fears over a european debt crisis and silver looks like even more of a good investment right now.

The question for many potential investors is how to invest in silver. Indeed there are many ways to invest both directly and indirectly including silver bullion, silver coins, silver mining stocks and my personal favorite silver exchange-traded-fund or ETFs. Whichever vehicle you chose to invest in you should always be aware of the advantages and disadvantages of that particular method of investing. Speak to an independant financial advisor if you are uncertain about investing in precious metals like silver before taking the plunge.

If you’re a more seasoned investor and know the risks of investing in precious metals then you’re probably already invested or getting ready to invest. The question is when to invest. Do you wait for a downturn or buy on the rise. My advice would always be to buy on the rise but not get too greedy and cash in profits early. If silver does rise above $50 per ounce I will be taking a profit on 50-75% of my silver portfolio which includes silver mining stocks and ETFs.

Investing In Silver Through Silver Coins

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Over the years, people have been collecting coins for various reasons. Some collected just for the love of it, and their beauty while others did so with an eye of making a profit. Though initially it was only done by a few people, especially the royalty, more people recently began appreciating it. In fact the concept of numismatic began to make sense and people started getting serious about it. Investing in silver coin is no rocket science, it just requires particular understanding and its function in the market.

One of the reasons for venturing into this business is that its price keeps on increasing. The popularity of valued metals is going from strength to strength. Nowadays most investments are through the precious metals, the likes of gold and silver.

The increasing impact of computer technology and more so the internet, has transformed the way business is carried out. It is now possible for one to easily trade or make business transactions online. People can be able to buy and sell through the internet. Advertisements can be posted online as well as processing of orders. Information about the silvery coin can reach a lot of customers who spend most of their time online faster.

The internet provides a way in which the customers can browse through the many numismatic items by price. There are also auctions that they can be able to participate in. They just require logging in order to find the listings that deal with auctioning of such coin and submit their bids.

Before spending money on these metals, it is important for people to first of all consider their financial status. The amount of money that one is willing to commit to the investment plays a big role in determining the returns. Large investment may results in increased returns as compared to small investment.

Collectible numismatic refers to numismatic coins whether gold or silver, that are collected due to their value and characterized by certain attributes such as their quality, rarity age and condition. Sometimes the collectible numismatic does not necessarily refer to gold or silver, but those which are exceptional and can be ranked. On the other hand, bullion coins refers to a type of investment covering coins and valued according to the quality of the metal that makes up the coin. They are also produced in large quantities as compared to the collectible numismatic that are produced in small quantities.

Certain characteristics of these metals make it more valuable. Attributes such as rarity, adds the aspect of beauty and uniqueness to it thereby increasing its demand and value. Once the coin is scarce to find, its intrinsic value appreciates. Other reasons why rarity causes the value of the coin to appreciate in value includes historical value, liquidity meaning it can be easily exchanged for cash, and even privacy.

Popularity varies from coin to coin. Some are more popular than others because of their beauty and significance due to history. Coins can last for a long period of time and coin collectors value highly metals that portray the historical pattern of a certain age or a certain period in time. Popularity also varies depending on where the coins were minted. There are certain minting firms that have coins that are valued highly as compared to others, due to their mint mark.

The value changes depending on the age of the item, a hundred year old coin is more valuable than a coin that has been minted recently. Its condition is also another factor that affects its value. The condition could be determined by certain principles, like being given a number. A certain range of number being given to indicate the best preferred condition that the coin is expected to have. An example is numbers from 60-70, with 70 being considered ideal.

Metal content of the coin influences its value. Those that contain more metal content are more valuable that the ones with less metal content. In as far as metal content is concerned, it is vital to know how to distinguish coins that contain silver content and those that do not contain silver content. A close look at the edge of the coin will provide some insights. If the edge is all covered with silver colour, then it is clad, but if it contains copper, then its not.

Investing in silver coins provides an opportunity for dealing with various varieties. Of particular interest is the Morgan Silver Dollar, which refers to prominent variety of coins that are ranked among the most collected in the U. S. Their variety and overdates are wide. They are beautiful and large as well as of high quality.

What Are The Most Traded Silver Stocks In The USA?

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According to market experts, silver prices are expected to go up, especially after outpacing gold prices in the year 2010. Driven by monetary factors and forces of supply and demand, the prices of the precious commodity are expected to reach its all time high in the next 12 to 18 months. This has been orchestrated by the fact that silver trading grew by 29% while customer numbers also hit twenty-one thousand. If you need to know what are the most traded silver stocks in the USA, then here they are.

Silver Wheaton Corporation (Ticker: SLW)

This is one of the unique companies in this line of business. It is considered by many as the most stable silver trading company. This is largely attributed top its stable and unique model of doing business. It mainly obtains the commodity through signing long-term purchase contracts. This is contrary to most companies which do the mining by themselves. Currently, it has about 15 purchase agreements, from where it obtains high quality silver at relatively lower prices. According to the company estimates, it will hold about 40 million ounces of silver in annual production in 2013 from 23.5 million ounces in 2010. Its mangers own up to 10% of the shares. On the other hand, its return equity stands at 9.7%.

Pan American Silver (Ticker: PAAS)

According to analysts, this company could gather momentum and outperform most trading companies. The management of this company is busy reassuring its investors about its ability to extract silver in one of the biggest open fields in the world. The project which is in Argentina is estimated to contain close to 632 million ounces of silver. Analysts are confident that the company is capable of outperform silver, after experiencing some uncertainty over whether it should continue operating or not.

Goldcorp (Ticker: GG-N)

Although its name denotes as though it operates in gold stock, Goldcorp is one of the top traded silver stocks in the United States. Globally, it controls about 13 million ounces of silver annually. After the company reported that its revenue had risen to 28 % in the third quarter, its share rose to $48 down from $12. According to analysts, Goldcorp is one of the companies that a serious investor should consider eyeing.

Silver Standard (Ticker: SSRI-Q)

Though its transition from exploration to production posed many challenges to this company, its able leadership and high-quality assets are still attracting many investors. Its darkest moments came in the third quarter of 2011 when it lost about ten cents a share, against the projection of 6 cents by Wall Street. This was caused by lower silver production and higher interest rates.

Its attempt to adjust to recover from foreign exchange loss also cost it 4 cents per share against market projections of tow cents. However, it brought in a new CEO who is working hard to get it out of the woods.

Minefinders (Ticker: MFN-A)

This company can greatly benefit with any slight jump in silver prices. According to market projections, the company, which currently trades at about $10.80 could instantly hit between $13 to $15. However, there are risks associated with this as well which is between %7 to $7.5. The company lost about 7 cents a share in the last quarter of 2011 which was much lower than what market analysts had projected. Currently, Minefinders controls the multimillion ounce silver mine in Mexico.

Coeur d’Alene Mines (Ticker: CDE-N)

Over the last few years, the company was nowhere in the limelight. However, it picked up its performance in the second half of 2011, becoming one the most respected companies trading in silver. Until September of 2011, its shares were valued at 2 cents a share, which was much higher than the analysts had projected. However, this was below consensus estimates which projected that it would gain about 7 cents a share.

Buenaventura Mining Company Inc. (Ticker: BVN)

This is one of the companies that trade in both silver and gold. It currently operates in seven mines and is also a minor shareholder in many others. Besides silver, it also mines copper, and has about 18.5% shareholding in Cerro Verde copper mine. Despite that fact that its CEO is a major shareholder, the company still scores highly in terms of management. This can be manifested by its returns, which hit 28.5% in 2010. This is arguably the highest of all silver stocks in the whole of the United States. Currently, it trades in the New York Stock Exchange, and boasts of over 10.1 billion market capitalization. Its sales have increased at the rate of 10% for the last three years, making it one of the traded silver stocks in USSA.

Endeavour Silver Corporation (Ticker: EXK)

This is a Canada-based company that primarily operates in Mexico. It scores very highly in term of performance. Though there have been stock appreciations of 188%, its sales volume have increased at the compounded rate of 45% in the last three years. This is by far the highest of any other silver company. This will eventually translate to better earnings and even appreciation in stock values in the next few years. Its share price is valued at $5, and a market capitalization of about $225 million dollars. With each distinction come some security concerns. However, such risks come with greater rewards.

Mines Management, Inc. (Ticker: MGN)

This company does acquisition, development and exploration of mineral deposits in the USA. Its biggest project is found in Montana, where it owns about 1,500 acres of land mines. Its directors and top officers have heavily invested in the company, owning about 20% shares. The management has however managed to increase the values of the shareholders from $0.91 to $2.64 which represents a 200% increase. This was done without taking any debts into consideration. Currently, it does not have any long-term debt and boasts of 0% debt-to-equity ratio. Its balance sheet is also very strong. It has a working capital of $7.7 million dollars and liabilities totaling $1.7 million. It has a share price of $ 5 and a market valuation of around $68.83 million.

First Majestic Silver Corp. (Ticker: AG)

This company has over $1.61 billion dollars in market capitalization. It is trading at the ratio of 64.25. At the moment, its share price stands at %15. On the other hand, its debt to equity ratio stands at $2.46. Its accumulative debts are around $5.47 million.

Investing In Silver Through Silver Stocks

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“A mine is simply a hole in the ground with a liar on top.” Mark Twain’s famous observation often seems true to investors who know little about purchasing mining securities. However, investing in silver through silver stocks provides investors with a way to take advantage of this rapidly expanding commodity. The key to success is to do plenty of research and to know what to look for when choosing an investment.

Demand for silver is expected to rise steadily for several reasons. According to the World Jewelry Confederation, countries like India, Russia and China are expected to feed a rapid growth in demand for the metal. Also, rapid industrialization in emerging market nations is increasing demand for this precious commodity. In addition, commodities research indicates that above-ground stockpiles are at a 50-year low. The price for the commodity has increased from $4 per ounce to $19 per ounce in recent years. All of these factors point to great opportunities for investors.

Silver stocks produce returns in a couple of different ways. First, they produce profit from cash flow, which translates into dividends for shareholders. Second, the rapid increase in the value of the metal should pay off nicely in terms of capital gains. Investors should take care to invest only in stocks of companies that currently have verifiable production. If companies are speculating but have nothing to show for it, then investors could be setting themselves up for tremendous loss.

Traditional ways of evaluating stocks include taking a look at P/E ratio and debt to equity ratio. P/E ratio, or price-to-earnings ratio, is calculated by dividing a stock’s share price by its earnings per share. Theoretically, this tells investors how much other investors are willing to pay for each dollar of the company’s earnings. Debt to equity ratio lets investors know how a company is financing its activities. If a company’s debt to equity ratio is above competitors in its industry, then the company may be getting too much in debt. This is especially true if an industry is facing tough economic challenges.

Evaluating mining stocks also means taking a look at the mining company’s costs. One factor that investors should consider is production cost for mining relative to the stock price. To discover this information, investors should take a look at the company’s 43-101 resource statement of ounces. If a company’s production cost is about $5 per ounce, and the stock price is close to that level, then investors should buy. With silver selling at $19 per ounce, the stock would represent a great value. However, if the stock was valued much higher than the cost of production, then investors would want to choose something else.

Another factor to consider when choosing securities is the company’s exposure to its mining activities. Investors should choose stocks of companies that make money primarily from mining activities and not from other activities. To determine the company’s exposure, take a look at its R-square coefficient. The closer the R-square coefficient is to 100, the more exposure the stock has to the company’s mining activities. The price of the commodity will more closely affect the movements of the stock’s price in this scenario.

Investing in mining stocks has some unique pitfalls. The rising costs of raw materials and energy can cause production costs to rise, affecting the security’s value. Also, mineworkers may strike or, unfortunately, be involved in mining accidents, resulting in negative publicity that negatively affects stock price. Regulatory changes and environmental issues, including the presence of protesters, can also have an effect on production. Finally, if mining is taking place in countries that are experiencing political upheavals, production could face unavoidable interruption.

Investors looking to capitalize on this valuable commodity should not forget ETFs. ETFs typically track the price of silver and silver futures, and these funds may be a little easier for inexperienced investors to understand. Any investment, however, comes with inherent risks, and ETFs, though less complex, are no different. Investors need to stay on top of market trends and to know how much they have to lose before investing in any security related to mining.

With positive reports about manufacturing beginning to finally emerge in the United States, investing in silver through silver stocks is a great way to take advantage of expansion. By researching tradition indicators, like P/E and debt to equity, and adding indicators like costs relative to stock price and exposure to mining activities, investors will choose the best stocks on the market. Also, investors won’t fall victim to Twain’s old adage when they take the time to do their research. After all, unlike speculators, the numbers never lie.

Investing In Silver Through Exchange Traded Products

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If you are thinking of investing, it may be time to look into silver exchange-traded products. You will find these funds traded in major stock markets. However, it may be a bit confusing when you see things like ETF, CEF, and ETN trading. Here is a brief explanation to help remove some of the mystery.

ETF stands for exchange-traded funds. They are very popular among investors and traders as they do not require a large investment. Most trading is done with ETF investments through a broker and there are many kinds of commodity ETF investments. The emergence of silver ETFs has caused the price of this precious metal to rise, making it an excellent investment at this time.

ETF trading is advantageous in several ways. For example, if you are thinking about investing in mutual funds, you are hit with capital gains taxes as soon as you make profit. However, with ETF trading, capital gains are not seen until you actually sell the fund. This kind of trading offers investors a lot of flexibility as they can be sold on margin or short.

ETNs or exchange traded notes are unsecured debt securities. Their value is based upon a market index, like the stock market. There is no protection of the principle, and you have more than one option. You can sell the fund like a stock, or you can keep it until its maturity date. When dealing with ETN investments, the credit worthiness of the issuer is the most important consideration.

With ETN investments, you have access to things that may not be available from ETF products. There is a greater chance for profits with ETNs. However, with greater rewards comes greater risk. It is important to do your research with ETN investments, and if you invest intelligently, you can do well.

With ETF trading, you may need to pay annual taxes or capital gains on dividends or distributions. ETNs do not pay dividends, so there are no annual taxes. Also, long term capital gains are more attractive than short term, for tax purposes.

CEF or closed end funds are listed on a stock market by an investment company. First, a company raises capital with the fund and then it is listed and sold on the stock market. CEFs are different from normal stock, as an investment adviser manages the fund. Values are determined by supply and demand as well as the fund’s securities.

Unlike the open end fund, the closed end fund only has so many investments available for it. Also, there is no minimum purchase on this kind of investment. With closed end funds, many investors find the opportunity to buy at a discount. This can enhance one’s investment portfolio immediately. Also, the fixed amount of shares creates a stable investment opportunity, when invested with a reputable company.

To make a long story short, there is a lot of potential in silver exchange-traded products. They offer a lot of advantages to investors large and small. If you are uncertain, talk to a trading professional or broker for advice. They can point you in the right direction.