TRADING vs HOLDING for the long term

There are a lot of reasons why there is volatility in the price of gold and silver. Instead of being too technical about it, I simply try to find out the fundamentals of Supply and Demand and keep my metals for the long term.

Trading is an ART. One of my investor friends (David La Suer) an American who runs a successful US Investment company taught me this phrase "Nobody can time the market". If there are people who can, the chances of locating these people are slim and the fees associated with their advice would be staggering (talking about us being in the Philippine setting). Trading is not necessarily Investing, Trading is a procedure that takes a lot of time and experience.

Jim Rogers, the co-author of the Quantum fund with George Soros in his book "Hot Commodities" said that "Great Traders are Maestros of Timing". He admits that he is not a good trader and would suggest that a newbie person seeking to be in the commodities market just needs to figure out if the commodity is worth buying (if it is at it's lowest point or price) and then just rides out the seasons of busts and booms.

The fundamentals of the metals are very clear, I would like to share a few of them for you to be inspired to start your own portfolio:

1. The Gold and Silver ratio is still far per ounce- it will take the price of silver multiplied 70 times to get to the price of Gold. This is a fundamental since historically, gold and silver have a ratio of less than 50.

2. Silver is a metal that is industrially used and therefore will run out, just like Oil. Your laptop, your celfone, your nitty gritty gadgets are by chance, containing silver. It is a great electrical conductor. Silver is mined INCIDENTALLY, meaning it is not mined on it's own since it is a by-product of gold mines. I am more bullish on Silver rather than Gold.

3. The Mass Psyche is going to be awake. People in developed countries are still swayed by political moves and media blasts that the economics of the US and Europe will greatly improve. What they are feeling now is just a temporary relief brought about by the printing of too much Currency in the system. When the hyperinflation sets in after a big financial collapse, the metals will once again come in to save the day. And you know what happens when the masses see that gold and silver are exponentially growing in value.

The metals are still cheap and very affordable in terms of price. Do not be swayed by the volatility in the market, instead of parking your money in the bank where it is losing it's value faster due to inflation, go and get some metals for yourself.