Rule #1 - When all else fails, there is silver.
No one likes to be a prophet of doom, but the simple truth is that silver
is the world's money of last resort. Should a severe economic collapse
occur, leaving paper assets worthless, silver will be primary currency for
purchase of goods and services. (Gold will be a store of major wealth,
but will be priced too high for day-to-day use.) Thus, every investor
should own some physical silver-and store a portion of it where it's
accessible in an emergency.
Many times we are asked what is the best form of silver to purchase.
Our answer has been to consistently begin with old silver coins, known
as "junk silver" in the trade. Although, we do not see a time where you
would have to rely upon silver coinage for daily expenses it has proven
useful in the past.
When our offices were in Los Angeles during the mid 1970's and the
first Oil Embargo took place, two private gas station owners set up
pumps that would accept payment in silver coinage. We point this out
simply to let our readers know that the Free Market can provide some
very interesting solutions during difficult times.
Finally, it must be remember that the one financial fact that history bears
out is simply all paper currencies eventually fail.
http://www.silver-investor.com/
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Rule 2. Start small- keep it simple.
Too many investors, upon deciding to beef up the metals portion of their
portfolio, buy too much physical silver at once-and in the wrong forms.
Beginning metals investors should concentrate on pure bullion bars or
coins, in smaller sizes, looking to pay a minimum premium over the
actual metal value.
Avoid commemorative coins, decorative items, jewelry and other
collectibles, all of which carry large premiums and have limited resale
markets.
Anyone that has spent much time on our website www.silver-
investor.com knows we have consistently advocated that all metals
investors begin with a physical position before making any other type of
precious metals investment.
Certainly, mining stocks offer leverage and can at times multiply your
wealth substantially it is only by starting with the sure thing, real metal
that you build a foundation of wealth.
http://www.silver-investor.com/
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Rule #3. Boost the buying power of your dollars with mining shares
Whether you are a seasoned investor or just getting started in silver,
gold, metals, and mining investing,
The Morgan Report is the honest, straightforward investing approach of
a lifetime investor specializing in silver. If you follow the Silver Investing
Rules, you get an introduction to the advice shared every month in the
Morgan Report..
If you are a typical investor, you cannot expect to be an expert on silver
and the silver market- but you can invest in the people who are.
Once you have established a core holding of physical silver, leverage
both your knowledge and your buying power by purchasing the stocks of
mining companies.
* These shares are highly responsive to changes in silver prices,
frequently producing much higher percentage returns than the metal
itself.
This rule is one that many silver investors know quite well and the joys of
watching your mining stock outperform the increase in bullion prices by
a factor of two or three to one is exciting.
However, leverage works in both directions and when the price of the
precious metals fall back the mining shares fall back hard. This is
normal market behavior and should be anticipated by the savvy metals
investor.
* Again, mining shares analysis is difficult and in the speculative area
nearly impossible. Because of this fact, it is important to do your own
homework carefully.
* Also you can subscribe to a service that provides insights into this
area. We do our best to diversify and to give clear signals to area we
think have merit.
* However, we are only human and have made errors in the past. It is
the nature of investing that you cannot be 100% accurate, although for
the first two years our report did have nothing but winners.
Those days are over and in today's market is it more important that ever
to be careful and use proper money management.
If you do not wish to put in the study required to succeed in this area of
investing, we suggest you consider a gold mutual fund. Unfortunately,
there is not a silver mutual fund at this time. This is a question we are
asked quite often.
http://www.silver-investor.com/
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Rule #4. Dollar - cost average to lower your costs - and increase your
discipline.
Dollar-cost averaging is an ideal way to implement Rule 2. By making
same-dollar purchases at regular time intervals, you wind up buying
more metal when prices are low and less when they are high.
This approach helps you develop discipline, erasing the "trader'
mentality that infects many market participants and instead fostering an
"investment" philosophy.
Dollar-cost averaging also eases some of the sting when prices move
against you, allowing you to view the downturn as an improved buying
opportunity rather than a disappointing loss.
Many beginning investors think "if only".......
* If only I had subscribed to The Morgan Report four years ago and
bought the one Top Tier silver company "61 Neutron" as Charles
Savoie described it, look at how much money I would have made.
* It is human nature to want to be precise in all our affairs, but in the
real world of competing against others for the one thing most of us think
about daily--- Money-- a mature approach is necessary.
* Getting in at the exact bottom and out at the exact top is an
amateurs approach. In a bull market "dollar cost averaging" is a wise
approach.
* However we want to caution our readers that averaging down in a
speculative mining company can be very dangerous.
* We normally do not advise doing so. However, in a top tier company
or gold mutual fund this is acceptable in most cases as long as the bull
market is intact.
The Morgan report will be a bit more aggressive than we have been in
the past, in our speculation section we will be taking some short term
profits along the way.
http://www.silver-investor.com/
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#5. Do not get a raw deal from your dealer.
You are half way through the Silver Investing Rules; if you buy real silver,
know your dealer...well!
Each of the Silver Investing Rules forms the foundation of the Morgan
Report. Now you can get the inside information from David Morgan
himself, visit here for more...
Because of the specialized nature of the physical metals markets,
selection of a well established dealer with a quality reputation is
essential.
1. A good dealer will provide timely executation of your trades at fair
prices with reasonable fees.
2. Note, as well, that the lowest price is not necessarily the best price.
3. In the past, some dealers who squeezed their price margins too low
in order to attract clients were unable to make delivery, leaving those
clients holding the bag.
This unfortunately is an area that prevents many people from purchasing
precious metals in the first place. People are leery of dealing with
someone over the phone and sending them money, and then waiting for
their precious metals to show up.
It is very rare that something goes wrong and almost all dealers are
reputable. However, as in most aspects of life the occasional fraud
does appear.
* It has been our experience that most questionable dealers are fairly
easy to spot by simply using common sense.
* Also, we must mention that fraudulent schemes normally appear
near the end of the cycle which is not for another five years or so in our
view.
Years ago as we were nearing the peak in gold and silver, a nation
wide campaign was started in all the major newspapers in the U.S. and
the Headline read "Buy Gold and Silver Below Spot"
Now, this is simply impossible and anyone with a shred of common
sense would have stayed clear of such a "dealer" , but since some
people seek that special deal many customers were taken to the
cleaners as this company filed bankruptcy.
Again, we want to point out our special coin report doing actual
transactions with several different dealers in the U.S. the small price of
this report could save you time, money and heartache.
Make a great day,
The Silver Investor
http://www.silver-investor.com/
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Rule #6. What's yours is yours - so keep it that way. a core principle of
David Morgan's approach to investing.
Today let's examine the sixth rule of silver investing
While it is wise to keep some of your silver where you can get to it
easily, it is also important to keep the bulk of your metal in a safe place-
especially as you holdings increase.
However, if you establish an account with a brokerage warehouse or
other public storage facility, you should make sure your holdings are
kept segregated and that you can inspect them when you wish.
Anyone that has studied the Silver-Investor website knows there is far
more paper silver than real silver in the world. In fact our primary
premise is that the real sustained move up in silver will not occur until
the market recognizes this fact.
* You certainly can participate in alternative precious metals
investments such as pool accounts or options but remember you are
dealing in the paper world and expect settlement in paper not in metal.
* Fully paid Comex warehouse certificates held by you in your name
do comprise real silver.
* Be real, get real to begin with, then if you wish speculate further.
In fact in 3 days we will be looking at speculations...
Make a Great day,
The Silver Investor
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Rule 7. Silver speculation's like cough syrup- good in small doses, but
too much can make your portfolio sick.
Depending on your individual goals and your personal tolerance for risk,
a small portion of the assets you commit to silver can be used for
speculation, perhaps in futures contracts or options on futures.
Never forget, however, that this type of trading is speculation, NOT
investment.
This is probably our most important rule. However, some people are not
willing to understand what speculation means.
* We have featured some companies in the past that simply did not
perform and as a consequence some people had sick portfolios for one
simple reason...
* They did not obey the rules of speculation.
* They fell in love with a certain story or region, or drill grade and put
more into a particular speculation than was prudent.
* We cannot emphasize this enough, we all like to bet a little to win
big, and this means you must keep enough money to make several
bets.
Some wish to make that big score and put too much into the speculative
category, or fall in love with one particular stock.
If you do not diversify properly you chances of success are lessened.
Make a Great day,
The Silver Investor
http://www.silver-investor.com/
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Rule #8.
A little information can mean a lot more dollars.
As you read these rules, remember that applying the Rules to your
portfolio is key, which is what we help you do every month with the
Morgan Report.
You do not need to be a student of the silver market to profit from your
metals investments.
However, you will greatly increase your chances of success-and the size
of your potential profits-if you understand the fundamental factors that
drive silver prices and pay regular attention to current supply and
demand considerations.
The Morgan Report gives our insights into how and why you need invest
differently during certain economic conditions.
We have followed the Bond markets, key currencies, the precious
metals, the general stock market and from time to time do special
features such as interviews with CEO's and financial stalwarts such as
Jim Puplava of www.financialsense.com
Only two more rules to cover, by now you have been thinking and
developing a strategy that will enable you to profit during this commodity
cycle.
Make a great day,
The Silver Investor
http://www.silver-investor.com/
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Silver #9 Collecting silver is an art- but not really an investment (Ten
Rules For Silver Investing)
Owning fine silver items- including rare coins - can provide great
enjoyment and personal satisfaction.
Like paintings and other artworks, they are beautiful and often quite
valuable-and, if you are astute at buying and selling, they can generate
large profits.
In spite of this, however, always view such holdings as collectibles, NOT
as investments.
When you need your silver-or simply want to cash in- you do not want to
have difficulty selling or be forced to forfeit a large aesthetic premium,
both of which are likely with silver rarities.
Rare coin collecting is really outside our area of expertise. If you enjoy it
that is fine, if you want to learn more about it we have included a special
coin report in the Morgan Report Newsletter.
And in 3 more days, you get the last investing rule...
Make a Great day,
The Silver Investor
http://www.silver-investor.com/
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The Final Rule #10. More than 10 percent is too much of a good thing.
Thank you for taking the time over the past few weeks to read, listen,
and explore the Silver Investing Rules. If you like this series, you owe it
to yourself to check out the Morgan Report today.
Carlos Santillan,
As the last step in the series, this Final Rule brings it all together for your
investment strategy, the tenth rule of silver investing.
10. More than 10 percent is too much of a good thing.
No matter how good the market looks-or how worried you are about the
future of civilized society-you must always remember that silver should
make up only a small portion of a well-diversified portfolio.
I recommend committing no more than 10 percent of the average
portfolio to silver-regardless of how strong you feel about the potential of
the metals markets.
Note: Under the current economic conditions, I feel 20-25% is more
appropriate, than the original 10 percent per the book global-investor
book of investing rules pages 301-303. At the time the book was
published the economic conditions were more stable but now that the
world is in a war environment the higher allocation is necessary!
The final decision is yours and yours alone. What is so interesting is
something we reported in The Morgan Report some time ago about
proper portfolio allocation.
A fifteen percent allocation to actual physical metal was shown be
necessary even during the best of times according to Ibbotson
Associates of Chicago Illinois.
As stated in this well researched and extremely expensive report "Of the
seven asset classes, the precious metals class is the only one with a
negative average correlation to the other asset classes. It is worth
noting, excluding cash, precious metals is the only asset class with a
positive correlation coefficient with inflation, which is further evidence
that precious metals act as a hedge against inflation."
We truly enjoyed bringing you this series on the ten rules of silver.
Make a great day,
The Silver Investor
http://www.silver-investor.com/
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