welcome Certus! we certainly need more people like yourself to contribute ideas here

yes, i do agree that once silver has finished it's cycle, property is one of the best asset class to park our money in. especially property not only will appreciate in value but also bring in cash flow.

while at gold silver ratio, i believe you are a little conservative. i'm looking at at least 1 : 10. it might take several attempts to reach there but eventually it will be there. i know historically data has proven that 1 : 16 is among the most stable ratio, but gold silver ratio has been overshoot from it's mean for a long time. the longer it has overshoot, the more aggressive it will bounce to the other direction, which is closing the ratio. there are some experts are even more bullish on this suggest 1 : 8. but i will keep my plan as 1 : 10.

i like your idea of buying at every major pull back too. as mike maloney (author of Rich Dad's Advisors: Guide to Investing In Gold and Silver: Protect Your Financial Future) said, "every pull back is a gift". i see no reason why not to buy at a pull back. at one point, when a pull back happened, i did not have enough cash because i just bought it right before the price drop. so i took out my money from my reserved / emergency cash account to stock up more silver (of course later i did fill back my emergency cash account).

This post has been edited by property101: Feb 4 2012, 09:39 AM

I find this to be misleading. You should qualify your statement in detail so as not to mislead the uninitiated.

Regards
PM

hi pubmut, i'm not sure which part of the statement sounds misleading. but let me try to clarify the it. i will first explain the terms i have used in the statement, then i will elaborate more on the statement.

once silver has finished it's cycle = when silver price has reverted back to mean or when silver price is priced at a fair market value.

property = apartment, condo, landed house, shop lot, shopping mall lot, etc

asset class = investment tool that a person put his money in with the intention to grow his wealth or at least preserve the value of his money (not to be eaten up by inflation).

appreciate in value = price of an asset keep going higher. property & silver can both be considered as asset. an example for property appreciation: 3 years ago, a property worth RM200k; 3 years later, this property worth RM260k. the property has appreciated RM60k. an example in silver, 3 years ago, it takes USD10 to buy 1 oz of silver, 3 years later, it takes USD34 to buy 1 oz of silver. silver price has fluactuated from USD10 to USD34. (people dont usually use the term "appreciation" for silver price, but idea is the price has increased over a period of time)

bring in cash flow = when a person owns an cash flow asset, this asset will give his money to spend. for example, if a person owns a condominium and he rents it out, after using the rental to pay for bank loan installment and other maintenance related cost, anything extra is considered as his positive cash flow. his can spend this positive cash flow.

let me again put this into very layman terms. that statement basically is explaining the following:

when silver price has peaked, an investor will want to sell the silver off before silver price drop. no one has a crystal ball to predict exactly how high could it go, but there are several ways to benchmark what is the fair values. once the silver investor has exchanged his metal with cash, he will not want to hold on to his cash for too long. he will have to look for some other investment tools to park his money at. property is one of the best places to put the money in because unlike silver, property will both appreciate in value and bring in cash flow from rental. however in this decade, silver is destinied to perform better than property. therefore well informed investors will choose silver now. once they have cash out from silver, the next best place to park one's money in is property because again, not only property will appreciate in value but also bring in cash flow (which silver cannot). the idea here is simple, one can hold property forever because it will forever give one cash flow. one cannot hold silver forever because silver investment is riding on a bubble. ideally everyone want to exit before the bubble. once a person has exit, where should he park his money next? if you ask me, my answer is property.

of course, depending on a person's risk appetite, although silver is a good investment, one must be able to determine for himself how much of silver shall he invest in. for example for a younger person, he could park lets say 90% of his money in silver than other investment tools in this cycle. or for an elderly person, he should consider park lets say not more than 50% of his money in silver because there are still some uncertainty in silver investment and his personal needs (especially medical needs). for the elderly person, it might be wiser to keep more cash; while for the younger person, it could be wiser to invest more of his money and keep less cash.

if you need an example, here is how i personally do it. i'm in my early mid 20s, i have high risk appetite, but yet i have precious metal, property and cash. without any income, i could still survive and take care of my family for 2 years. i keep property for appreciation and cash flow. i keep precious metal to ride on the bullish trend. once the bullish trend in silver has peaked, i will (most likely) convert the cash that i got from selling off the silver and use it to buy more property.

hope this explains

This post has been edited by property101: Feb 5 2012, 09:19 AM

You are right. Investment is about a portfolio of assets. Every year one asset class outperform others, and the following year the fortune may reverse. Attached is a summary of asset class return over a 15 years period in the US, and you will realise that Precious Metals only come up 2nd best return after Real Estate, even after the 2007/2008 real estate bubble crashed. Investment return of Precious Metals only give 'longkang' return prior to 2002.

We are now in the 10th year of Precious Metals bull run, of course there are quite a few price pullbacks during this period. Precious Metals becoming an important asset in your portfolio, maybe 10-20% ideally, as they are another 10 good years to run. It is fine if you started your investment in precious metals and have 90% of your asset in it, but remember to par down when opportunity comes for diversification in longer term basis.

Anytime is a good time to buy property, provided you get the right kind of property that generate revenue stream like rental. Everyone here seems to quote Robert Kiyosaki a lot, without realising that he had much more real estate asset than Precious Metals, should be more than 10 times at least.

Investment is about shifting your asset classes in a different ratio given the prevailing time and place, and is not that one asset is far more superior than the other.

Bullion coin is a great investment even with USD2 premium over low cost premium bar for most markets outside Malaysia. In Malaysia, bullion coin is a very poor investment as you have only two choices.
1) Pay 10% sales tax and 5% import tax, and that will bump up your premium over bar by USD2 + 15.5% tax. If Malaysia government introduce GST with 4% rate, they will abolish sales tax of 10%, and you will be down 6% automatically. When we buy precious metals, beside hoping for price appreciation, we are also preparing for worst scenario of hyperinflation. In that situation, 1oz of silver is worth 1oz of silver; regardles 1oz of bar, 1oz of bullion coin or 1oz of Numismatics coin.
2) Buy cheap bullion coin, guaranteed didn't pay government tax, meaning you are in possession of smuggled good. You may said, no worry, it is the seller's problem. Try to buy car that way. We are dealing with precious metals, a form of financial exchange medium, and I am sure we are not far away from authority's eyes. My advice is you maybe investing your life saving into Pecious Metals, put your money into every other Precious Metals except silver coins. Don't listen to those smugglers out to earn your money without caring for your financial safety.

By the way, you may opt to buy 1 or 2 pcs of each bullion coin to enjoy it for the beauty and as your collecton, buying beyond that is not a very good financial investment.

I hope I can save a few souls here from listening to some really poor advices posted here. I rest my case.


PS: Update on my experiences on importation:
Gold Coins and bars: No tax
Silver bar: no tax
Silver Round: 1st 5 times no tax, 6th. time levied 15.5% tax, 7th time no tax again.
Silver Coin: 15.5% tax

There is missing decimal in the table, the 15 years average annual return for Real Estate should be 13.04%.

This post has been edited by taurusbull: Feb 5 2012, 09:16 AM


Attached File(s)
 Periodic_Table_of_Investment.pdf ( 234.03k ) Number of downloads: 44

thanks for sharing all the sifus here

Thanks to property101 and taurusbull for the clarifications. It does help the newbies and pros figure out what to do.

Cycles do exist for each asset class and we need to be good history/cycle students to understand these cycles and profit from it.

My exception to your statement, property101, was with your general assumption that properties will all rise in value over time. In the very long term (>15 years) it _may_ be correct, and I say "may" as it is also dependent upon type of property, location, infrastsructure, time of entry, loan rates and all associated factors.

I will emphasise the understanding of property cycles and time of entry as I, too, have experienced the negatives of all items mentioned above. Therefore, your general statement does not apply to me, despite the fact that currently we are in a property boom/bubble. I am only thankful that I have more than enough earning power to get through it.

Taurusbull, the historic cycles of asset classes need to go back further than 15 years in order to get a good feel of the trends, but I believe you know that.

Thank you again for your clarifications, as I do believe all will profit from it.

Regards
PM

yup, i agree that property investment depends on the associated factors you mentioned above.

i believe this largely depends on the experience a person has gone through. i have not personally experienced property felt in value, except HEARING bukit beruntung story. i grown up and live in klang valley, as far as i can remember, i havent seen too much property price has gone lower than the previous years. except for high end properties in KLCC / MK areas during financial crisis time. well, what i'm saying here is, yes, i do acknowledge property is NOT a SURE way of making money and there is NO guarantee that the property will go up in short period of time, it also depends on the associated factors mentioned above, however in many cases, over a long period of time, the probability of making a profit is usually higher than making a lost in property.

yes, you are right about the 15 years. when i refer to property, i'm talking about long term investment. the fundamental in property is not meant for short term flipping. those who have been flipping from 2009-2011, if they continue doing it for the next few years, i could only wish them luck. it only takes 1 bad deal to bring them back to square 1. for a layman like me, when choosing property, i always look for cash flow property. price appreciate is an bonus, i dont bet my future on it

nice to discuss this, but hopefully we are not turning this into property talk thread

This post has been edited by property101: Feb 5 2012, 10:42 AM

Agreed. Highly articulate.

i always believe that seller with good service + good product should be recognized. here is my personal experience:
http://silverinmalaysia.com/ah-yu-electronic-scale/

This post has been edited by basSist: Feb 7 2012, 10:42 AM

Hi prop

How does one come up with those ratios.
Isssit the ration of gold/silver available above ground?

bro basSist...i thought for now the site is only for us internal testing + feedback?
he told me he and his developer will fix the issues we reported and will tentatively have an official launch on 10th

hi prophetjul, yes, ratio for availability above ground is one of them.
other factors could include historical data.

in fact, gold silver ratio is just one of the many benchmark tools the professionals are using.
there are also other benchmark mechanism such as measuring silver against property, measuring silver against Dow Jones, etc.

there are too many of "stuff" to be benchmark with, depending what an individual believes in. but generally speaking, gold silver ratio is one of the most reliable ones. it wont go wrong too far. by the way, have you check out my post on Gold Silver Ratio? here is the link, http://silverinmalaysia.com/gold-silver-ratio/

hope it explains

This post has been edited by property101: Feb 7 2012, 08:46 AM

The Five Myths Of Silver Investing
Ryan Jordan



Oftentimes perception, and not reality, rules the day with the thousands or millions of speculators placing short term bets with assets like silver. These perceptions are particularly strong given that paper players in the silver market often control the price in the short term (6-8 months), since there is so much more paper silver than physical metal out there. As I write this, we are seeing the unwinding of quite a bit of speculative, paper activity at the COMEX, with open interest numbers (meaning the number of players in the casino) lowering to levels just above where they were in the fall of 2008 (when silver was below 10 dollars). The price of silver has fallen, but as far as I'm concerned, there is no fundamental reason for silver to be so cheap. Instead silver fundamentals are badly overshadowed by misconceptions (or outright lies) about silver. Here are five common myths about silver that I bet many speculators still believe are true:

1. Silver is an "economically sensitive" metal

During the recession of 2008-2009, the CPM Group estimated that silver demand from photography, jewelry, and industry dropped by roughly 80 million ounces (CPM Silver Yearbook, p.69). Mine supply also increased by about 30 million ounces, along with a 15 million or so increase in recycling. So in order for the price of silver to remain stable (theoretically), you would need investors to make up this roughly 100 million ounce difference, which is exactly what they did. Given the fact that people understood the need to buy precious metals during a banking crisis, investment demand for silver increased by nearly 100 million ounces at the same time as demand fell and other sources of silver also increased. (p.11)

Over the course of 2008 and 2009, the silver price more or less remained stable, even as it saw wild swings induced by paper trading. So, during one of the worst recessions in modern memory, real, physical demand for silver cancelled out declining industrial use. An important point to remember when someone tells you the silver price is destined to go down in the next recession.

2. Silver coins and bullion are more plentiful than gold

In fact, it is the exact opposite. Being generous (and using data from the CPM Group as well as the Silver Institute) there are maybe 1.4 billion ounces of silver coin and bullion in the world, versus roughly 3 billion ounces of gold coins and bullion. Yes, it is true that recently about 80 million more ounces of silver bullion/coins are produced each year than gold ones, but that still means that it will take over 15 years before the silver stockpile in the world even equals that of gold, let alone becomes greater. So why is the price of silver something like 50 times cheaper than gold? Ask the paper speculators above.

3. The high price of silver will drive down demand from industry

This one has had no basis in fact for the period from 2000 to 2010. During that decade, industrial demand, according to most estimates, basically remained flat (GFMS World Silver Survey, 2010). This is amazing, when you consider that the price of silver went from 4 dollars to over 20 in that period. But because silver is used in such small amounts in things like electronics and solar panels, increasing silver costs have yet to dampen demand for highly desired toys like computers and cell phones. And many silver experts believe that such demand will only increase in the years ahead. You should realize that a rising silver price does not seem to dampen industrial demand.

4. At the right price, billions of ounces of silver will get recycled

Many do believe that there are nearly 6 times as many ounces of silver jewelry (and silverware) than gold jewelry in the world. So you might think that there is a lot of silver that will get melted down someday. One problem with this argument is that much of this silver either a) cost way more than even the current bullion spot price and b) is held in very small amounts all over the world by over 1 billion people (oftentimes women). They won't care to sell for a very long time-if ever.

But there is an even more important point here. I bet most people who claim to follow the precious metals don't realize that as of 2010, we had yet to see more silver recycled than during 1980. That is thirty years of silver recycling more or less going nowhere, even as the price of silver spent more time above 20 dollars an ounce in 2010 than in 1980. I am going to be optimistic and guess that we will finally best the old recycling high this year in silver (at over 300 million ounces). But in a world where 300 million ounces of silver is only 10 billion dollars, and in a world where investors are slated to purchase nearly that much silver in physical form over the next couple of years, you really have to wonder why anyone would think there is all of this silver just lying around ready to be brought to the market to cool off silver's price. And given what I said about how impervious industrial demand is to silver price increases, a lot of whatever silver jewelry gets recycled will be used and consumed by industry (even assuming that preservation techniques get better as the price goes higher.)

I also would not expect mine increases to somehow meet demand: few industry experts believe silver can increase more than 4 or 5 percent a year (roughly 50 million ounces, or less than 2 billion dollars), especially when nearly 80% of silver is a byproduct of metals like copper, lead, and zinc.

5. Retail silver investors are fickle/ there is no plan to remonetize silver

This myth had some basis in truth, at least according to the experts who tracked silver buying and selling activity in the 1980s and 1990s (such as the CPM Group or Silver Institute). Many agree that retail investors (probably following the lead of governments) sold far more silver than gold during the twenty years between 1985 and 2005. Probably to the tune of over 1 billion ounces. So many felt that silver investors were flakes who really didn't have the staying power of gold investors. Or, as I mentioned above, it may have just been the case that average investors followed the lead of governments, since those governments dumped far more silver than gold during the same period (gold is the only precious metal held by central banks, in addition).

But in recent years, I am struck by how many proposals there are like the one from Hugo Salinas Price in Mexico attempting to bring back silver coins into the market in his country. Then we have all of the state legislation in the United States aiming to bring back both gold and silver into economic transactions. Remember, silver is perceived to be the money of average people (even as it is rarer than gold) so any grassroots effort to bring back precious metals into everyday transactions will dramatically increase silver's value. We have already seen the amazing turnaround in silver retail investment buying over the past few years (hundreds of millions of new ounces) and I think some people are slowly waking up to how undervalued silver is. But believe it or not, many, many more have yet to do so.

Don't Be Fooled By Silver Market Myths

As I said above, I understand that fundamentals often have no place in markets. This is why so many traders focus on chart patterns, or volume indicators, or anything other than the underlying, real-world reasons for an asset to move up or down in price. You can also see the lack of interest in fundamentals from those large speculators who believe that rumor-mongering is a safer way to make money than actually focusing on legitimate distortions in the market. You might be surprised how much money you can make from simply playing games, or from manipulating others' emotions-at least in the short term.

In the end, of course, I don't think gambling or trading wins out. Yes, there are those few great traders out there, just like there are a few great gamblers around. But there are far more people who are simply the sucker drawn into the great casino called "the market." This is a sad commentary on how our current financial system incentivizes reckless, speculative behavior. But that is just the way our world works- at least for now.

However, every day we see more evidence of the need for retail investors to truly diversify their portfolios with an asset that is set apart from the stock/bond market or banking system. The world is not going to end, but gradually, perception will come around to the cold, hard facts that currency debasement, financial repression (artificially low interest rates), combined with fiscal austerity are here to stay. In an environment where measures such as quantitative easing are really only easing the transition to a downsized economy (at best), people will be looking for those assets that never took part in the bubbles associated with the world before 2007 in the first place. Those assets which don't need leverage to move higher (even though leverage is a part of the silver market), or those assets which don't rely on endless consumption or indebtedness on the part of the consumer in order to become more valuable.

You may think silver will keep getting cheaper, and you might be right in the short term. But in the long term, this price correction really will be a blip on a screen, and when silver's price one day explodes higher again, you will kick yourself for having bought into misconceptions like the five myths regarding silver.

University of San Diego Lecturer
University of San Diego, KIPJ 262, 5998 Alcala Park, San Diego, 92110
Primary Tel 619.260.4756 begin_of_the_skype_highlighting 619.260.4756 end_of_the_skype_highlighting
Industry Education/Academia
ryanjordan@sandiego.edu

http://www.silverbearcafe.com/private/10.11/myths.html

nice read, thanks for sharing

halo
like to ask how to invest silver ?
through bank or some company? or buy physical?

Hello guys.can anyone help me shed some light on investing in silver mining companies,in malaysian setting.just thinking,while we consistently hoard silver for d future,why not set aside some money in those who produce silver and enjoy the yearly dividends and possibilities of capital appreciation .then put these profits to buy more physical silver

sorry if this is a bit off topic.thanks in advance for your help

hi there, you are at the right place at the right time.
here is a quick answer for you:
http://silverinmalaysia.com/buy-silver/how...er-in-malaysia/

alternately, please hold on a little while, i'm writing a book title
Practical Guide for: Investing Silver in Malaysia

it is planned to be launched by end of feb. stay tuned to the website above

This post has been edited by property101: Feb 7 2012, 09:16 PM

thank Bro

Good article.

Off topic, but newsworthy.

A Global History of Debt by Region