Today is going to be a day we discuss the importance of detaching yourself from the emotions of precious metals investing. In general, most people that have invested in gold and silver have done so with passion and conviction, and rightfully so. The insurance and peace of mind that is provided with owning precious metals in an uncertain world is invaluable beyond the nominal current values of the gold and silver.
I notice that many people such as myself, have been so passionate about investing in precious metals, that they over-invest in this sector and fail to think rationally about the actual price. I’ve personally been caught-up not making sound decisions regarding them because of the passion that I got wrapped up in when investing in the precious metals arena. I’ve talked to some who are nearly 100% invested in precious metals and own no other assets. I don’t recommend this!
However, if you’re going to be Passionate, Now is the Time!
The truth is, right now the sentiment in the precious metals complex is extremely depressed. If I was to assess the confidence index in the gold and silver markets, it would be at or near an all-time-low. However, the confidence in the sectors when the prices were nearing their 2011 highs were through the roof. It’s a clear indication that people are investing with their emotions and not thinking rationally with their savings. The common tendency of buying at the top and selling at the bottom has been so clearly evident in this arena.
When it comes to the fundamentals of the economy, nothing has really changed, and the uncertainty for a systemic collapse is as risky now as it has ever been. There are many reasons behind why someone will decide to invest in a commodity, but many people are doing so because of economic uncertainty. These same people are rightfully turning their backs on the failing fiat currency systems.
For those who are reading this for the first time and have not invested in any gold or silver, consider looking at the charts and seeing how high the prices were in 2011. Silver is currently down more than 50% from its brief high in 2011 of $48.55. Gold is down over 30% from its brief high of $1,900 in 2011.
Rick Rule is often quoted for saying, “you are either a contrarian or a victim.”
Contrarians are definitely Buyers of Precious Metals Right Now in 2014!
What I’ve eluded to at the beginning of this article was to not get emotionally attached to your precious metals investment. Do you have an exit strategy? What price will satisfy you enough before you actually SELL this commodity for another investment that historically compounds?
I’ve personally had to ask myself these tough questions. I’ve had to consider what my price will be before I flip my precious metals savings into some other investment, and I encourage you to do the same. We know that when the prices start to move, they tend to move fast. The excitement and EMOTIONALISM can take over the ability for investors to make firm unwavering decisions, but I encourage you to make the decision now while the waters are calmed and there is no noise to get distracted by.
Do you think it’s reasonable to see silver back at $40 over the next two or three years? That’s about an 100% return from where it’s at now. How about gold back to $1,900 over the next two or three years? That’s about a 45% return from where it is now.
The trading opportunity that is present in gold and silver currently is very attractive. Consider taking action while the prices are depressed, and you can still be considered a contrarian for doing so.
Chief Editor for CrushTheStreet.com