Silver Etf's Pro's And Con's Please Help

I like physical, with etfs, you have a bunch of electronic paper.

Yes ETFs are faster to trade than physical sure, but remember nobody can call a top. Most people who chase the top, end up losing their shirts in the market. ETFs are for more advanced traders. If you haven't traded stocks before, then I wouldn't recommend going straight to ETFs. I mostly hold stocks, with an occasional ETF. Most commodity ETFs are adjusted daily, so you don't want to be in them for more then a few days. They are for the day trader who wants to make a quick buck. If you still want in, go ahead. But remember if you don't have the experience you'll most likely end up losing your shirt.

My disclaimer first: I am not in ETF's and I have only investigated gold ETF's. When I did look at the gold ETF there were several things I didn't like. First,the fees and charges were too high for my tastes! Second,and more importantly,the payout is in dollars,unless you had $50,000 invested,then you could collect in physical gold. That was a red flag for me because it screamed"leveraged" and there was no protection. Like any other stock,it could go to zero and you lose. Also,it seems like the big boys are protected but the little guy is at their mercy and if things go bad you get paid off in worthless paper and they walk away with physical gold bought with your money. I am a cynical old man but I have lost all trust in anything run by Wall St. types because they will always use the little guys money to make their fortune but push come to shove,the little guy will lose. If convenience is what you are looking for ETF's are probably the way to go but convenience can be costly,just look at all of the things that are convenient they are either expensive(think ready to eat foods vs raw food items)or have fees attached to them. As I said,I will hold physical in my own possession and I don't think there is an option you could convince me to try,there is too much greed in the world.

Um, there are some things stated here that just aren't correct. Please, please do some independent research. Even an article in something like CNN Money can lay out the pros and cons quickly and accurately. I have 2 minutes though:

Pros:
Allow you to invest in silver without taking possession, bypassing those expenses (storage and insurance)
Backed by physical silver in most cases, but not in dollar to dollar parity
Extremely liquid, so far
Trade just like stocks, so you can use stops
You determine your holding period, from seconds to forever
Tax advantages over mutual funds

Cons:
Not a substitute for physical silver, it is a tracking vehicle
Expense ratios are high, eating into your return
Buy/sell commissions
Could be leveraged
Price could decouple
Trade just like stocks, so you should understand the limitations of and how to deploy stops

There are more. They can be a nice compliment to your portfolio, As far as experience, I'm long, so it's been good. No downsides in my experience beyond what's associated with stocks. With a low cost brokerage account, you can start fairly small if you'd like. 50 shares of SLV are a bit under $1900 at the close. Good luck!

Ed,
Don't you think the chances of a silver ETF gapping through your stop would be much, much greater than your garden variety equity? Say SLV is $34.39 at the close (today) and you set your stop at 5% under or $32.67, but overnight silver drops to $29 in Asia. SLV probably opens under $28 with all the sell pressure and blows through your stop. I'm thinking you have that exposure every trading day with SLV. Sure, it could happen with any stock, but that's mostly associated with quarterly earnings or event/disaster related. Interested in your thoughts.

Anyway, the major theme behind the details is that everyone investing in silver ETFs should understand stops, consider their usage and be aware that your stop price is NOT guaranteed. I just don't want people thinking if they place a stop at $x that they are guaranteed that price in a down move. So the nature of commodities is volatile and that brings to mind another con: you probably need to pay closer attention to SLV than say, GLW, MSFT or MO.

All I am saying is that "gapping" is a bit like being hit by lightning... possible, but far from likely. There are a lot of other things that should be of much greater concern to an investor than this. I'm not worried about it and will not allow something with a miniscule probability of occurring to cause me to do things that will reduce the odds of successfully investing my money.

As I said before, NOTHING is perfect. A trailing stop set properly will be FAR better than a standard stop loss order and hugely better than no stop at all. Clearly, a more volatile investment, which silver definitely is, cannot use a tight stop. The stop must be larger than the typical day to day volatility. If it is, then routine moves in the ETF price will not cause me to be stopped out of the investment. Stops are useful protection against the vast majority of Non-routine market moves.

For me, the bottom line is that I make money in the market by doing the things that increase the odds of success. Using a trailing stop does that. It allows me to participate in the upside of the investment while having some very good down-side protection. I don't want to hover over a keyboard all the time to watch my investments and some automation in this is helpful.