Where To Put A Chunk Of Change: Pm Vs. Etf Vs. Stocks

@mmerlinn: I wish I knew more about cars... could've saved myself hundreds and maybe made hundreds doing what you suggested. Just don't have the free time to dive into that world as of yet.

@JSH and Jack: I suppose half a year is an eye-blink in investment time then. I am pretty convinced that in the medium to long term (3-5 years +) the PMs will do alright, and was just curious what the strategy would be for the short term. There really is no deadline come a 6 months time, but this is not money I want to put away long term either (already have something set up). I figured I wanted to move this money around and see what I can make of it.

@Earle: I get excited when buying a $300 silver bar and seeing spot rise 20% in a week. But when you think about it, that's only $60 profit, less if I bough just above and sold just below spot. Have to be dealing with at least 3-4 zeros for the returns to amount to something significant.

And no, it's not really "small" in our penny-pinching books, but the chunk of change is unexpected money that came our way, so "disposable" in that we had already budgeted our spending comfortable without it. So, I thought i'd wet my hands with my first attempt at trading (invested before but never directly traded) instead of blowing it on what my wife call my toys (cameras, backpacking gear, archery equip...) or spending it on nice coins that i'll almost definitely end up being so attached to that I won't sell.

Wanted to see if there were compelling reasons not to go into ETFs and mining stocks.

The compelling reason not to go into a PM ETF or mining stocks is that you say you can't lose the money. Investing in commodities, which PM's are commodities, is a very volatile world of investing. You can make lots of money or loose lots of money in a very short time. Commodities are not generally recommended for new investors. It really depends on where you are financially. Do you have the basics covered?

Do you have 6 months of expenses set aside in an emergency fund?
Do you have outstanding debts to pay off?
Are you maxing out your 401K or IRA's to take advantage of the tax advantages?

If you have the basics covered, then go ahead and try to time the commodities market with a silver ETF. If not then work on laying the foundation for your financial future. A well funded emergency fund takes a lot of stress out of life.

Let us know what you decide to purchase.

I'd put that chunk in silver and see what happens in 6 months. What's the risk of silver dropping below $30ish in the next 6 months? I'd vote slim.

I chose physical PMs, but almost selected cash - not in the bank, but cash in hand. both because of short time frame and because of the precarious situ in Europe that could make USD rise short term

Short term, I have been a little worried about gold and silver, they seem to be dropping a bit! And I just bought almost an ounce of gold (which is a LOT for me) so I've been a little nervous.

But all of my silver, and gold (mostly in silvertowne bars, ASE, 1/10 AGE), are for a long term investment. in the Long run, gold seems to follow inflation pretty closely, and with all of our debt, I cant see inflation turning around anytime soon.

But in the short term, gold and silver seem to be hopping all over the place! As far as what you should do with it? Well if you where gonna buy some PM's, and you know its for the short term, I think buying an ETF would be the way to go.... very easy to buy, very easy to sell. Downside? Well a 7-10$ commission fee (depending on your broker of course), and of course the 28% uncle sam is going to take out of the profits for tax purposes.

But, I dont think I would be comfortable investing in PM's in any kind of short term scenario. Thats just me though! Theres still so much I dont understand.

I chose ETF (say, GLD) over physical ONLY because of the short time span prescribed. I would not assume I could cover the spread in physical gold in 3-5 months even in an strong market. The spread in ETF's is much narrower . . . razor-thin, compared with physical. Otherwise, I would probably never again buy "digital" gold.

Pobox... you are really "rollin' them bones" on this one. I have been reading a LOT of info on the Internet regarding the PM miners and many of those who comment on this keep repeating that the miners are very undervalued and due to move upwards very strongly. Of course, they have been saying this same thing for quite a while now while physical gold and silver just keep on trouncing them. At some point, these folks will be right but who knows when that will be? Glad to hear that you are seeing a positive return so far, though. Hopefully, these two issues will do quite well for you.



I agree with the reasoning here but would NEVER put any of my money at risk in either the SLV or the GLD ETFs. There are just too many negative comments on the net about how manipulated these are. I downloaded and read the SLV ETF prospectus and cannot remember ever seeing a more convoluted document in my life. If they were trying to obscure their activities and confuse prospective shareholders, they have succeeded admirably. IMHO, it would be better to go with a physical PM ETF or fund, such as the Sprott funds, SIVR, or PPLT.