Silver Investment: The Lowest Risk, Highest Return Potential vs Stocks & Real Estate
The comments above & below is an edited and abridged synopsis of an article by SRSRocco Report
Silver will be one of the best investments as leverage in the stock and real estate markets evaporates. Unfortunately, investors are no longer capable of recognizing when an asset displays high or low risk. Thus, fundamental indicators are ignored as investors continue the insane strategy of buying the dip.
You don’t need to be a financial or technical analyst to spot the high versus low-risk assets. All markets behave in cycles, and asset prices will peak and decline. Both real estate and stock asset values are near their top, while the silver price is closer to its bottom.
While US median home prices are 52% higher than their low in 2009, the Dow is a staggering 220% higher during the same period. If US real estate values are high risk, then the Dow must be extremely risky.
We see a much different setup with the silver price. Not only is it way off the highs set back in 2011, it is also just 40 cents above its 200-day moving average.
With silver at 2% above the 200-day moving average, it is clearly the lowest-risk asset compared to the Dow or real estate values. Furthermore, the Commitment of Traders (COT) Report suggests that the very low net commercial silver short position also indicates that the silver price is bottoming.
The Commercials’ present net short position in silver is back to its cycle lows. While the Commercials could continue to liquidate more short contracts, as the silver price falls a bit lower, we are closer to forming a bottom than a top. So silver is the low-risk asset to purchase and hold while US residential real estate and stocks are high-risk assets to sell.
It will take time for these markets to correct, but nothing goes up or down forever. However, the horrible irony of how the markets will play out in the future is watching investors get wiped out because they are unable to distinguish between high-risk and low-risk assets.