How the Smart Investors Buy Gold and Silver

Following are the core axioms, that if practiced and taken to heart, will result in your having NO REGRETS in your precious metals investments:

1. ALWAYS REMEMBER WHY YOU CHOSE TO BUY GOLD AND SILVER IN THE FIRST PLACE! This is actually the most important axiom on the list. This may seem so basic that it need never be mentioned in the first place, right? Well, too many precious metal investors have forgotten over time what led them to originally buy gold and silver.

Most buyers will initially cite issues such as monetary and fiscal policy, domestic politics, reserve currency status, debt and deficit levels, world affairs, reduced freedoms and other issues that concern many of us. These buyers assure me that while appreciation would be nice, they go on to state that they are aware the metals could decline in value, even substantially, but either a rise or fall in the price does not affect their purchase motivation.

They want to own metals in order to protect against inevitable defaults, inflation, emergency spending currency and to convert paper money into a private, tangible form not easily tracked.

Fast forward, and the metals prices have risen. Now they are very happy. Their investment has appreciated, their net worth has grown and all the factors cited above are covered. What a prudent and prosperous investment!

Fast forward again. Now prices have sold off significantly, and the metals buyer has either lost much of his or her gain, or the price is below their initial entry point. What was a prudent purchase has now become a "losing" investment in the buyer's eyes. "Did I make a mistake?", they ask themselves.

Metals are now at bargain prices, but instead of buying more at tremendous sale prices, there is hesitation or no interest. "Why would I want to compound a mistake?", they ask themselves? When other products or items go "on sale" we get excited and are motivated to buy. Not the case with precious metals unless you are a seasoned buyer that has weathered prior market price corrections.

So, ask yourself, why did you buy in the first place? Are those reasons still valid? Concern yourself less with the cost of the metals and more with the peace of mind they provide. And when they go on sale, buy more if you are able!

2. GOLD AND SILVER ARE INSURANCE FIRST - PURE AND SIMPLE! In their purest form, precious metals are insurance, unless you are buying gold and silver purely for speculation or collecting purposes.

3. IF YOU ARE GOING TO BUY RARE COINS - BE AWARE! Direct marketers employ salespeople who are typically compensated on straight commission. Gross margins in the bullion business are very slim, typically 1 to 3%. Rare or graded coins on the other hand, can carry margins of 25% to 100% or more. Hence, there is a strong motivation for the commissioned salespeople to move buyers toward rare and graded coins (whether they meet their investment objectives or not!)

Don't ever let a salesperson talk you in to buying numismatic/rare/antique coins for ANY reason other than serious collecting or speculating. They are not so much a precious metal item as they are a collectible in line with artwork, investment grade diamonds and other rarities. The profit margins are very large and commission driven. As a result, they should occupy a very small percentage of your metals portfolio if you are not a collector or speculator.

4. PERSPECTIVE AND BALANCE. For the foreseeable future, when other asset classes like stocks and real estate are doing well, the precious metals may languish. Historically, that's what they are supposed to do. Remember, their primary role is that of insurance - insurance against any and everything that can/could go wrong. You buy insurance before you need it, not when you need it (think of a house fire). Presently, there is an abundance of easy money through overt monetary expansion as well as covert electronic, intra-government, inter-Central Bank agreements and trillions of new off balance sheet disbursements.

This is the list of simple "DON'TS" that seasoned investors have taken to heart:

1. Don't ever buy gold and silver from a pawn shop - you are NOT getting a fair deal

2. Don't let a salesperson talk you in to buying bullion that is not low premium and easily authenticated

3. Don't ever buy gold or silver on leverage

4. Don't buy gold and silver without first understanding the full cost (the "all in cost") that includes product cost, insurance and shipping

5. Don't ever buy from a dealer that won't buy back any item they sell you at fair market value

Avoiding the risks above positions you to begin investing with the wisest investors.

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Understanding the Gold Silver Ratio and How to Swap

Swapping the Gold/Silver Ratio - Seeking a 15 - 35% Return With No Cash Outlay

The upward trend in the metals has many investors owning both. But, there's more you can do with gold and silver bullion than just buy and hold. You can also periodically trade, or "swap", one for the other. To do so successfully, you first need to understand the gold/silver ratio.

The gold/silver ratio tells you the number of ounces of silver it would take to purchase one ounce of gold at a specific time. If you examine gold and silver prices going back 4,000 years, will find:

The historical ratio is 16:1 (it has taken 16 ounces of silver to buy 1 ounce of gold)
For the last 100 years, the ratio has been 30:1
In the last 12 years, the ratio has held closer to 60:1
In just the past the past 5 years, the ratio has fluctuated from the low 40's to almost 100
As of March 1st, 2011, the gold/silver ratio was sitting slightly below 40:1
How do we take advantage of this fluctuation?

First - we time our purchases based on the ratio. When the ratio is relatively high, we favor silver in new purchases. When the ratio is relatively low, we favor gold.
Last - we act when the ratio reaches tops and bottoms. When the ratio is high, we swap gold for silver. Then when the ratio drops, we swap silver back into gold. Said another way, we swap silver for gold when silver has appreciated faster than gold. Then, we swap gold back into silver when silver becomes "cheap" relative to gold. Every time we go through this cycle - gold to silver and back to gold - we increase our ounces. That's the whole objective. For example:

Suppose you had one ounce of gold, and the gold/silver ratio rose to 80:1. You would swap your one ounce of gold for 80 ounces of silver.

When the ratio contracted to 40:1, you would swap your 80 ounces of silver back for 2 ounces of gold, doubling the number of ounces you hold.
Next - we buy the form of silver or gold that offers the possibility of greater profits. During periods of high demand, investors will often bid up the premium on certain items 20 to 40% or more of their underlying value. At that point, we can swap the high premium items for others with lower premiums - capturing much of the difference, and converting that difference into extra ounces of metal.
Plus, utilizing this technique does not require any additional monetary outlay. Taking advantage of this ratio strategy beats the alternative - sitting still waiting for the price to rise.

CAUTIONS

Taxes - If you realize a profit from the transaction, you may owe tax on the gain. We do not offer tax advice. Please consult your tax specialist.
Market risk - I do not determine swapping price points independently. Rather, I lean heavily on others in the industry that have also been practicing technique for decades. The market may not cooperate. The challenge is correctly identifying the swapping points based on the relative valuations between the metals. The ratio might move much higher or lower than our target. We would then need to wait longer for the ratio to readjust itself. This is the essential risk to those trading the ratio.
Costs - Transaction costs such as shipping, the bid-ask price spread and commission can reach as much as 8%, although they should be lower. We will need to hold the trade long enough to recoup the transaction costs. Transaction costs associated with trading physical metals are higher than trading ETF's, futures or other paper instruments. In order to keep your costs low, we charge only one-half of our normal commission for a swap transaction. Many others will charge a full commission on both the buy and the sell side. Be careful.
BENEFITS

More Ounces at no cost - The Gold/Silver ratio trading strategy takes an investment that is otherwise stagnant and creates growth by increasing the number of ounces you hold - with no additional cash outlay. Between now and the end of the bull market you should conservatively expect to double your ounces utilizing this strategy.
What You Need to Know

When I first started to buy metals almost 20 years ago, my mentor frequently reminded me that he was not a prophet. In the same vein, if I am wrong about gold/silver ratio, it will cost you money. You'll buy silver instead of gold and the gold will outpace the silver, or vice versa. I don't think that will happen. Or, if it does, it will be temporary. I have successfully deployed this strategy numerous times. Sometimes the time-frame between swaps is relatively short - maybe only a few months. Other times it has taken two years or longer.
I am recommending swapping silver for gold when the gold/silver ratio drops to 48 or less. Consider swapping more if the ratio drops further. We will then seek the opportunity to swap that gold back into silver, capturing that gain in additional ounces of silver.
Because there are commissions and other transaction costs, you will not realize exactly the same ratio as the spot ratio.
The swapping strategy works for both small and large investors as long as you are willing to swap (150) ounces of silver or more. We will swap into the lowest cost, most readily available, most liquid gold coins - whatever offers you the most gold for your silver.
This is not a solicitation, only a strategy. Please do your own due diligence and make your own investment decision.
I still ultimately favor silver over gold as I remain convinced that the ratio will reach 16:1 (or lower) at the top of this bull market.
Housekeeping

It is impossible to swap an exact amount of one metal for the exact amount of another. For example, one ounce of gold might buy 50.17 ounces of silver, but never exactly 50 ounces even. I do my very best to swap as close to even-up as possible. The residual we will settle in cash. You may owe a small amount, or you may be due a small amount. I attempt to keep these amounts under $100.
The gold/silver swapping opportunity is presenting itself intermittently. If you are interested in learning more on how you might increase your metal holdings by 15 to 35% or more, with no cash outlay, please contact us. The window of opportunity is very narrow.

Call us for free shipping opportunities! 1-800-390-8576 http://FisherPreciousMetals.com

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Do You Know When to Sell Your Gold and Silver?

The age old questions that many people ask both themselves and us is, "When should I sell?", or "Is now the time to sell?" As you might already guess, there is no simple pat answer to either of those questions.

In the big picture, one must understand the comprehensive market cycles:

The 3 Phases of this Metals Market:

Phase One (Stealth Phase)

The smart money begins to enter when no one else can see the changes that are coming. These people are the forward-looking type. They are prepared to act upon what they believe. They can see ahead. They are not part of the crowd. This minority are the instigators of change. The crowd never initiates; they only follow what the minority first instigated!

Phase Two (Wall of Worry Phase - The Present Phase)

Next comes the institutional money such as banks, insurance companies, investment fund companies hedge funds, etc. Also from here emerges those companies and individuals which began in phase one and have now grown much bigger. Companies are now marketing to the mainstream crowd. Plus, there is rampant talk that the market is in a bubble. Investors and sideliners alike are trying to determine if they should buy, when they should buy, should they sell, is it too late, etc. Worry everywhere!

Phase Three (Mania Phase)

Now even the diehard bears have become believers. Everyone is speaking about the sector, including Joe Average, the Former Naysayer and the Newspaper Boy. Unscrupulous vendors are coming out of the woodwork. The market seems to go nowhere but up. You literally can't lose - and if you don't get in now, you'll be left in the dust forever (sounds like Florida real estate and dot com stocks.) This sector is the greatest time of reward for those who began and did not bail out in phase one or two.

There's Nothing New

It has happened repeatedly before.

In 1982 the smart money was buying into an infant sector of technology companies when no one else was paying any attention. Then, the large institutions and venture capitalists began to enter approximately between the years of 1989 and 1991 still unbeknownst to most. In 1995 the mainstream crowd began to enter the tech stock arena driving the price of this sector to the moon.

In the tech sector, mainstream America did not realize for almost thirteen years what was simmering and getting ready to explode. By the time most people realized this, it was well underway, and only those who were pre-positioned realized the tremendous gains.

It is no different with the current Precious Metals market we find ourselves in today. The mainstream still have not entered. However, it is bubbling away just under the surface ready to explode - just waiting for when the timing is correct for the mainstream crowd - and not a moment before. Just take a realistic look around you. Are friends and colleagues speaking about gold in the same way that people were speaking about the tech sector in the 1990s?

An Unfortunate Truth

Those who bailed out in phase one or phase two will never know what could have been if they had hung in there. However, those who stay the course and hold on with confidence will reap a multiplied return from the efforts of the seeds already sown by those who got out long before.

When You're In, Stay In, When You're Out, Stay Out:

When you have made your decision, whatever it is - stay in or stay out. It's the getting in and out that destroys your potential for large profits and success.

Additional Factors to Consider:

There are key factors one must consider when contemplating whether or not to sell your precious metals. Here is a list to review:

1. How much gold and silver do you own as a percentage of your investments, specifically, how much of each metal?

2. Are you over-weighted in either silver or gold, and do you need to sell one in order to balance your holdings or gain more of the other metal?

3. Do you need to liquidate in order to gain immediate cash for an emergency or alternative cost need? Please note that we frequently loan our clients money and they use their metals to collateralize the loan. If you are simply in a short term need for cash situation we can help with that as well.

4. Where is the market currently and where is it headed in the long term?

Then there are many that don't or have not yet asked those questions. The majority of our clients purchase gold and silver as long-term "hold" investments, anticipating a need to hedge against future inflation and both global and market instability. Many also believe that there is a chance that their metals may reach a time of utility before they even think of selling them. They also purchase them for portfolio diversity and often do not want to lose the additional asset class that their metals provide by selling them.

Call about free shipping opportunities! 1-800-390-8576 http://FisherPreciousMetals.com

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8 Reasons Why Silver Is a Better Investment Than Gold

1. The historic silver/gold price ratio was 16:1, but in recent years, silver is relatively cheaper ranging from about 40:1 to 80:1. On October 12, 2009, with silver at $17.75/oz. and gold at $1,057/oz., the ratio is 60:1. This means that silver is currently undervalued, and cheaper than historic norms, and thus it is a better investment than even gold if you want to "buy low and sell high".

2. The supply and demand fundamentals for silver are extraordinary. There has been an ongoing supply/demand deficit in silver for 12 years. More silver is consumed by industry than is produced by mining and recycling combined. Some say this deficit reaches back 60 years, and has consumed virtually all the known silver ever mined since the beginning of the world. The annual deficit has recently ranged from 100 million to 200 million ounces per year. Annual supply is about 650 million ounces, and annual demand is about 800 million ounces.

3. Considering refined and mined known silver reserves, there is far less silver in the world than gold. Approximately 150 million ounces of silver vs. 4 billion ounces of gold.

4. Most silver, 70-80% brought to market, is mined as a by-product of copper mining, gold mining, or zinc and lead mining. There are very few primary silver mines in the world, since most are really copper or gold mines. Therefore, mild increases in the price of silver will not bring substantially more silver out of the ground. Much silver is consumed in photography; electronics, medicine and numerous other industries. There is so little silver used in any one application (cell phone, photograph, electric terminal), that price increases in silver will probably not reduce demand. With a relatively inelastic supply, and relatively inelastic demand, it will require a dramatic explosion in price to bring the supply and demand deficit back into balance.

5. Famous investors have bought silver in recent years. In 1997, Warren Buffet bought 130 million ounces of real silver, due to the favorable "supply and demand fundamentals", he bought as much as they would let him legally buy, yet his purchase was with about 2% of the value of his portfolio. George Soros owns a large percentage of Apex Silver (SIL). Bill Gates owns a substantial position in Pan American Silver (PAAS).

6. In the gold market, there has been a large increase in paper futures contracts which are used to suppress the price. In silver, the relative amount of paper contracts is much larger. In other words, there are more paper shorts that will be caught in an impossible situation when the price of silver really begins to rise due to the fundamental supply demand gap. They will be forced to buy silver or go bankrupt. Either action will cause a dramatic rise in the silver price. If they default on the silver contracts, that will signal to the world the severe shortage of silver, and signal a great investment opportunity.

7. One of the cheapest ways to buy silver: You can buy U.S. coins dated 1964 or earlier, $1000 face value (4,000 quarters, or 2,000 half dollars, or 10,000 dimes), in a "bag" of "junk silver", which contain 715-720 ounces of silver, depending on how worn the coins are. In the early 1980's, when silver was $30-$50/oz., a bag of silver could be used to buy a house! We could see that day again - soon!

8. But historically, a silver dime was a day's wage, whether 100 years ago, or in Roman times when a denarius was a day's wage. This means that a dime of silver, worth $1.27 today, could be worth over $150 (which is a day's wage in today's money.) or more, now that silver is scarce. Actually, in 1926, a silver dime could pay the rent at a 5 star hotel for a month! That's worth about $6000 to $10,000!

You get so much silver for your money. A bag of junk silver weighs about 55 pounds, and is the size of a bowling ball. If you invested $100,000 into junk silver coins, at $12,450/bag, that would give you 8 bags each weighing 55 pounds, or about 440 pounds total. Could you imagine moving that much around your house if you had to move? Silver is so cheap it creates physical problems for investors today!

You will sometimes find quarters in a bag dating back to the late 1800's. In the early 1900's, you could work ALL DAY for a wage of ONE SILVER QUARTER. Imagine being able to buy a day's wage of real money for less than a dollar of today's money! Today, in 2009, a day's wage is over $100. Another way to put it is that the dollar has lost over 99% of its purchasing power over time. Yet, due to silver being undervalued, you can get 100 times the value of your money and labor if you invest in silver. Imagine if they paid a day's wage today of $100 in silver quarters; they would have to give you about 100 silver quarters today. The implications are that if silver returns to its historic valuations, silver will need to go up in value about 100 times, to $450/oz. Silver is truly a bargain.

I have studied silver for 14 years. At the risk of sounding like a conspiracy theorist, the silver price has been manipulated and kept artificially low for years. The United States used to have the largest strategic stockpile in the world - in excess of 3 billion ounces. Today we hold essentially zero. Today, some reports put the amount of available silver on the COMEX at 60 million ounces. (The COMEX stands for the Commodity Exchange, which is a division of the NYMEX - New York Mercantile Exchange. This is where precious metals futures contracts are traded).

This presents an investment opportunity of a lifetime. Actually, it is more likely that silver today is the greatest investment opportunity in the history of the world.

* Never before in human history, has the entire world left using silver as money.

* Never before in human history, has the entire world consumed nearly all the silver for use in electronics.

* Never before in human history, has silver become so cheaply valued.

* Soon, never before in human history have we virtually run out of available above-ground silver.

Silver is a steal! It's cheap - too cheap!

Every day I have the opportunity to visit with individuals and organizations. All of them share growing concerns and anxiety regarding the state of our economy and the fiscal and monetary policy of our government. Many people are considering safe haven investments.

For over fifteen years I have bought, sold, traded and managed precious metals portfolios. Over the course of those same 15 years, I have developed relationships with first tier distribution, mint and agency sources - cutting through layers of brokers, middlemen and retailers.

Especially during this time of economic uncertainty, there are numerous individuals and organizations "pushing" gold and silver. They are often recommending items with the highest profit margins, without regard to the Gold:Silver ratio, while attempting to "up-sell" and promote specific inventory that may not be the best for you, the investor. As a result, you end up paying "full retail" with an additional 5% to 20% in unnecessary commissions.

Fisher Precious Metals will provide you with uncompromising quality and integrity in all of your precious metal purchases. We truly advise and execute your purchase as if it were for our own personal investment. If you or anyone you know is interested in purchasing physical silver or gold, please contact me. Your interest and investment will be handled with absolute confidentiality. You can email me directly at: John@FisherPM.com.

(800) 390-8576

http://www.fisherpreciousmetals.com

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