{"id":655,"date":"2011-03-18T18:25:16","date_gmt":"2011-03-18T22:25:16","guid":{"rendered":"http:\/\/www.silver-investor.com\/blog\/?p=655"},"modified":"2018-06-10T10:58:17","modified_gmt":"2018-06-10T10:58:17","slug":"we-love-silver-but-we-respect-the-trends-be-careful","status":"publish","type":"post","link":"https:\/\/www.themorganreport.com\/blog\/we-love-silver-but-we-respect-the-trends-be-careful\/","title":{"rendered":"We Love Silver But We Respect The Trends – Be Careful"},"content":{"rendered":"
We Love Silver But We Respect The Trends – Be Careful
\nMarch 17, 2011
\nWe believe in investing in long term bull market trends.\u00a0 To illustrate this point consider the following.\u00a0 In theory, with only two trades and two and a half long term trends, an individual could have turned only $10,000 into more than $47.6 million dollars.
\n\"\"
\nThe above chart helps illustrate the power of identifying a long term trend when it comes to building wealth.\u00a0 However, the following arguments could be made in regards to the above chart.<\/h5>\n
    \n
  1. The chart does not consider taxes paid or other investing fees.<\/li>\n
  2. Hindsight is 20\/20.\u00a0 We can\u2019t expect to pick the perfect day to trade.<\/li>\n
  3. We don\u2019t all have 30 years to invest.<\/li>\n<\/ol>\n

    Let us address these comments individually:
    \n1)\u00a0\u00a0\u00a0 The chart does not consider taxes paid or other investing fees.
    \nThe simple illustration above does not consider some costs such as taxes paid or trading costs, but it also does not consider the benefits of dividends from stocks or mining equities within a mutual fund.\u00a0 To clearly illustrate our point we wanted to keep the math very simple and easy to understand so we left out external considerations that both increase and decrease the end number.
    \n2)\u00a0\u00a0\u00a0 Hindsight is 20\/20.\u00a0 We can\u2019t expect to pick the perfect day to trade.
    \nThe above chart uses monthly price data and the profit would be larger if we had picked the perfect intra-month day to trade.\u00a0 Additionally we recognize that we cannot pick the ideal day, week or month to trade all of our capital from one investment to another.\u00a0 However, it may be reasonable to attempt to \u201cdollar-cost-average\u201d into positions over time near a perceived bottom, and \u201cdollar-cost-average\u201d out of a position near a perceived top.\u00a0 We do not expect perfect results but instead we try to locate multi decade bull markets and avoid multi decade bear markets.
    \n3)\u00a0\u00a0\u00a0 We don\u2019t all have 30 years to invest.
    \nThis is a valid statement as many individuals may not live long enough to invest for 30 years.\u00a0 However, the above chart was meant to illustrate the power of the mega trends so we only used a modest initial investment of $10,000.\u00a0 Over a lifetime, investors will most likely invest more capital than $10,000, and that would increase their profit potential within a shorter period of time.\u00a0 Additionally, we try to identify intermediate term moves within the long term trends to help us identify lower risk entry and exit points within the mega trend.\u00a0 Our goal here is to maximize our profit potential from the major trend.
    \nBasically, in the above chart we are trying to illustrate the power of identifying long term trends, investing in the bull markets, and avoiding the bear markets.\u00a0 In our opinion short term trading is a very difficult and time consuming skill to master.\u00a0 At the same time the indefinite \u201cbuy and hold\u201d strategy concerns us as investors ride multi decade long term bear markets.
    \nInstead of trying to guess what will happen day to day and moment to moment, we want to identify the major bull market trend in the markets.\u00a0 When we backup and look at the large macro moves, the smaller fluctuations seem rather trivial.\u00a0 Imagine if you could build significant wealth and spend more time focusing on your career, relaxing and enjoying your family.\u00a0 Imagine if you simplified your investment decisions instead of spending many hours of your day in front of a computer screen making various short term decisions.
    \nSo how about now?\u00a0 Commodities are doing great!\u00a0 Silver is up to about $36 from a low of around $4 in the early 2000\u2019s.\u00a0 You can\u2019t lose by putting your money in commodities right?\u00a0 Wrong.\u00a0 Although we think precious metals are eventually going much higher we are careful not to forget about the intermediate down turns that all markets go through.
    \nWe get nervous when investing in one asset class or another gets \u201ctoo easy.\u201d\u00a0 Silver, gold and commodities in general have been \u201cspiking\u201d in price.\u00a0 Most people would agree that government money printing can only cause precious metals to rise further.\u00a0 In our opinion, this seems too obvious to be right from an intermediate term perspective.\u00a0 Additionally, the media has been focusing ever more attention on precious metals as they climb to new highs.\u00a0 In recent months we have seen three different instances of characters on reality TV shows \u201chunting for precious metals\u201d.\u00a0 We are aware of at least one reality TV show solely based on gold mining.\u00a0 Where was the media attention on precious metals in the 90\u2019s or early 2000\u2019s, when they were hitting lows?\u00a0 In our opinion, the time to buy any investment is when it is out of the spotlight and on \u201csale\u201d.\u00a0
    \nWe suggest that when the market appears to be too obvious and too easy to predict because it continues to advance in one direction, it often means that a turn in the opposite direction is nearing.
    \nAre we long term bullish on precious metals and commodities?\u00a0 You bet.\u00a0 In fact, we are probably more bullish than most.\u00a0 However, in the excitement of the current bull market move we are preparing for the new trend that will arrive sooner or later.
    \nTo learn more about our strategy and sign up to our free newsletter we invite you to visit our website at www.investmentscore.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

    We Love Silver But We Respect The Trends – Be Careful March 17, 2011 We believe in investing in long term bull market trends.\u00a0 To illustrate this point consider the following.\u00a0 In theory, with only two trades and two and a half long term trends, an individual could have turned only $10,000 into more thanMore<\/a><\/span><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[121,89],"tags":[],"yoast_head":"\nWe Love Silver But We Respect The Trends - Be Careful<\/title>\n<meta name=\"description\" content=\"We Love Silver But We Respect The Trends - Be Careful\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.themorganreport.com\/blog\/we-love-silver-but-we-respect-the-trends-be-careful\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"We Love Silver But We Respect The Trends - 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