Silver Investing - ETFs Are Different

The short definition of an ETF is, "A mutual fund that trades like a stock." But that doesn't mean you should trade an ETF like you trade a stock. When you take a look at the chart of an ETF on your favorite charting software the results look like a stock. But making buy and sell decision on silver ETFs the same way as you would make on a stock from a stock chart could be disastrous.

Many, if not most, investment strategies that use charts to determine buy and sell points utilize volume in some manner; accumulation distribution, overbought/oversold indicators base on a volume-based algorithm, or chart patterns in conjunction with volume, to name a few. The very credible theory on volume is that the institutional investors are the only investors with enough clout to make a noticeable effect on volume. Volume in conjunction with price action, or chart patterns, indicate supply/demand for the stock by institutional investors. There is a great deal of evidence to back up the theory. So much so that every successful investor I have heard of includes some type of volume analysis in their method or investing system.

So why the warning against applying your stock investing methods to a precious metals ETF? Put simply, unlike the price of a traditional brick-and-mortar, financial, or dot.com stocks like General Motors, Bank of America, or Microsoft, the price of silver ETF like SLV does not depend upon supply/demand for SLV.

The price of GM depends upon supply/demand for shares of GM stock. However, the price of SLV is: the price of a troy ounce of silver minus operating expenses. It is the price of silver that drives the price of SLV, not supply/demand factors for shares of SLV. It might be more accurate to say that price drives supply/demand of SLV, not the other way around.

Some would say that the price of silver is driven by supply/demand, and therefore the price of SLV is too. I cannot argue against that point of view--long-term. But it is the resulting price of silver itself that determines the per share price of SLV. Also, short-term, the futures markets has more to do with the price of silver than supply/demand of physical silver. A silver futures contract is paper silver, and this paper silver is 99% controlled by speculators.

Long term, it is supply/demand for physical silver that controls the price of physical silver, and therefore, the per share price of SLV. Volume analysis of physical silver is relevant to the price of a SLV. But that information is difficult to come by. And the price of silver is becoming increasingly more emotion based.

As much as I like using chart-based investment strategies that incorporate volume, my silver investing is based on the fundamental factors.

Learn how to protect yourself against the current (and impending) economic disaster with silver investing. For more information: http://www.esilverinvesting.com

Silver Investing Shocking Secret - How it Might Exceed $400 Per Ounce in 2010

So what is a better investment gold or silver? Many people might say gold but to tell you the truth silver can rise ten times higher as compared to gold. Many analysts are of the opinion that silver prices can rise as high as $400/oz in the next few months. First, let's discuss some historical performance of gold vs silver. Between 1970 and 1980, gold prices increased from the Bretton Woods fixed price of $35 per ounce to an unprecedented $850/oz. This was an increase of 2,329% in ten years.

Now, during the same period starting from 1970 and ending at 1980, silver prices jumped from a mere $1.50/oz to almost over $50/oz. This was an increase of 3,233% over a period of ten years. So, just compare buying a few ounces of gold as compared to silver and their returns over a period of just ten years.

Now, let me explain why this unprecedented rise in silver prices might happen. You see as compared to gold, silver has far more industrial applications. As the global economy starts to expand again in this year, the demand for many industrial products will grow. Silver like gold is available only in limited quantity. So you can well imagine what happens when the demand rises but supply does not!

The most important application of silver is as an electricity conductor. Silver wires are used as high tension cables. You will be surprised to know that silver is also used in a number of household appliances like refrigerators, washing machines, wall switches, fuses and so on.

Silver is used extensively in photography. This use might decrease as digital photography replaces traditional photography. But this will be replaced by new uses of silver in other industries. Now, take a look at your computer, every computer, server, monitor, cell phone and switch has silver. Lasers, satellites, high-tech weaponry and robotics, all require silver. Digital technology and telecommunications need silver.

A new double layer of silver on glass is sweeping the window market, as it reflects away almost 95% of the hot rays of the sun. A new electronic application for "smart tags" that are replacing bar codes could use significant quantities of silver. Silver is heavily used in chemical industry. Silver is a great reflector and as said before is used widely in mirrors and glass coatings.

Batteries use silver. Silver is used in soldering, pharmaceuticals, catheters and many other areas. So, you can well imagine as the global economy starts to expand again and the demand for these products and services increase, you will see a skyrocketing of silver prices.

Mr. Ahmad Hassam has done Masters from Harvard. Read this 40 page Gold And Silver Investing FREE Report. Discover Forex Brilliance and grab this powerful Multi-Timeframe Trend Dash Board FREE just now!

Cheapest Gold or Silver Investing?

First of all I don't think you can be hurt by buying/investing in either right now. If you picked either one and decided to go with that, I think you will be better off than about anything else you could possibly invest in. I am not a financial planner or investment advisor so before you take any of my advice at all, or buy a darn thing with it, consult someone else! There, now that I've covered my butt, here's my information.

Gold is mainly recycled and held. 95% of all gold mined in the history of the world continues to be held by mankind. There are approximately 4.58 billion ounces of gold in the world still available in some form.

What About Silver? According to the two industry silver surveys by the silver institute and the cpm group, there are about 250 million ounces to up to 650 million ounces of silver, or about 1/7th to amount of gold on the planet. It may shock some to find out there is a lot less silver on the planet than gold.

Which is more volatile as a price? Again, I can't imagine an upcoming scenario where anyone buying either is hurt but if you look historically the ratio between gold to silver has been much different than it is currently.

In 1792 the US Congress passed the First Coinage Act. The Act officially established the Dollar as our currency, defining one Dollar as a weight of pure silver, 371.35 grains to be exact. A Quarter Eagle ($2.50), was defined as 61.875 grains of gold. The Act legally set the gold/silver ratio at 15. In 1834, Congress passed the Second Coinage Act, slightly tweaking the gold/silver Ratio from 15 to 16. Since these times you have seen the ratio climb up to around 100 but since the 70's average around a 20-1 ratio. Would this point you more toward silver investing with the ratio currently being 55?

Which would you want? 55 ounces of silver or one ounce of the cheapest gold? Yes it would be harder to transport 55 ounces of silver than gold but with there being less silver on the planet and with all the newfound uses of the metal, I am stating my position as being one for silver investing vs, purchasing even the cheapest gold.

Ray Higdon is an American, a lover of our country and a homebased business advocate. You can find out more about Ray at Silver MLM Site

Secret Silver Invest - Hunting For Dollars

There is a werewolf standing between you and your bank account. Your bank account needs a hero and your hero needs a silver bullet. What do you do?

You put the comic book down and start thinking about how you can profit from this secret silver investment strategy and start hunting for silver dollars. Simply put, buy some silver. Buying silver is a hot topic for investors and according to some; the best time to buy is now. You can start your Hi Ho Silver strategy by starting out with purchasing pre 1964 silver coins.

The reason you need to buy your dimes, quarters and half dollars made before 1964 is because they used 90% silver at that time. After that, it dropped to 40% silver. This type of silver is referred to as "junk silver" because of the nicks and scratches they obtain through circulation and thus they are not fit for the collector who wants mint or as close to mint as possible.

However, do not let the name fool you; they are a very good investment. When you set out to buy your silver, start out searching on the Internet and keep your eyes open for good deals. Ebay usually heads the list as a place to start your search, but anything with the word silver in it that you type into Google will provide you with many options as well. Experiment with various word combinations. Nevertheless, do not limit your search to terms with only silver in them - also try pre-1964 U.S. Circulated.

If you need money now, like I mean in the next hour, try what I did. I am making more money now than in my old business and you can too, read about Martin Thomas in the link below. When I joined I was skeptical for just ten seconds before I realized what this was. I was smiling from ear to ear and you will too.

Quickest-way-to-make-money-on-earth.com

Imagine doubling your money every week with no or little risk! To discover a verified list of Million Dollar Corporations offering you their products at 75% commission to you. Click the link below to learn HOW you will begin compounding your capital towards your first Million Dollars at the easy corporate money program.

Quickest-way-to-make-money-on-earth.com