Comments on: Stocks and bonds and...silver or something?

Question: Stocks and bonds and...silver or something?

sarelicar — Wed, 12 Mar 2008 23:36:52 -0800

What are some great, informative sites/forums related specifically to trading/investing in/selling metals? Apparently metal is where it's at now that the dollar is dropping. I know little to nothing about finance and trading, etc. -

but my boyfriend does and he's getting into metals trading/futures/whatever you call it. He needs to bone up a bit on his knowledge of the particular subject, but I'd also like to support him by learning about the stuff myself. This whole question is probably worded incorrectly, so you should realize that I personally am a complete novice. I'd like to be able to talk to him about his work.

With that said; please, kind, brilliant, all-knowing Mefites, direct me to some quality entry-level info on the subject and also to some material that's more advanced (in other words, assuming the reader is in the industry) so I can support my wonderful man in his new endeavor. Thank you most kindly!

By: delmoi

delmoi — Thu, 13 Mar 2008 00:16:31 -0800

An easy way to invest in metals is by buying Exchange Traded funds. You buy and sell them just like stocks An example would be GLD or SLV. Here is a list I found googling for "Metals Etf" on Google.

By: zpousman

zpousman — Thu, 13 Mar 2008 04:23:38 -0800

agree with delmoi. Buy an ETF if you don't know much about a sector.

Also, I'd caution rushing into metals. By the time you, or your boyfriend, or some lowly individual investor starts to see the "writing on the wall" and pile into a sector, it's probably already completed, or almost completed its run. Gold is at 20 yr highs. Other metals are at similar peaks. And I think that, even as the dollar struggles, one could see many institutional investors (who spend millions of man hours / year thinking about this... that's their *job*) taking profits and bailing out... and into some other commodity which you'll be all about in 6-9 months.

By: Mutant

Mutant — Thu, 13 Mar 2008 04:25:50 -0800

Ok, delmoi has a good point about ETFs; I'm holding both physical metal (Gold & Silver) as well as a Silver ETF (SLV).

Although the hard core metals guys prefer physical there are many problems associated with holding the actual bullion (e.g, storage costs, insurance, can't easily transfer these assets, bid/ask spread is wide, inconsistent / unfavorable taxes compared to ETFs, this list is hardly inclusive) you should, if you're considering entering this market, please hold only ETFs (I'm only long physical gold & silver as I acquired these positions long before the ETFs launched, and don't want to trigger a tax event by selling).

So, books. Here's a couple that I can suggest you look at :

Schofield has written a pretty decent overview text, and Helyette covers pricing pretty well. I teach finance part time at a Uni in London, and we use both textbooks at the Masters level.

There are interesting metals / marco economics forums over at Kitco. But like all on line forums, no/few pros posting (in spite of what folks there will inevitably claim) and watch how you interpret information acquired there.

"but my boyfriend does and he's getting into metals trading/futures/whatever you call it. He needs to bone up a bit on his knowledge of the particular subject,..."

Look none of my business, but I just gotta say this - if someone doesn't have a solid understanding of the markets & the instruments, derivatives (e.g., futures, options on futures, etc) are an easy way to wipe out your capital, especially if you're trying to trade in this market.
Derivatives provide a mechanism to leverage your capital, and typically (not always, depends upon the instrument and what side of the trade you're on) this works both ways.

A good friend of mine turned $100K into about a million dollars the hard way - going long shares, picking and choosing, doing his research, cutting his losses, letting profits run - over a period of about five years. Read about leverage, heard about the currency markets, how much money was to be made, so fast, etc. Even went to a couple of seminars.

Then he managed to turn that one million into $50K in about six months. Bad bets on the direction of US$ / Deutschemark.

Metals now are very frothy, lots of retail money moving in. Probably a bad time to establish a new position.

By: mark7570

mark7570 — Thu, 13 Mar 2008 05:33:00 -0800

I'd second what Mutant said above. You're asking about a realm of investing that's not generally recommended for novices. Maybe your boyfriend has a good solid foundation already, but for you, you might consider reading The WSJ Complete Personal Finance Guidebook by Opdyke. It's well-written and an easy read... after you finish that, then you'll have a better sense where commodity trading fits into that picture.

By: sarelicar

sarelicar — Thu, 13 Mar 2008 11:27:30 -0800

Thanks for all the info and websites! I may not have made it clear that I'm not actually investing my own money, nor is my boyfriend, but he is in the business of investing other people's money who have made the decision to do so for their own reasons.

By: Justinian

Justinian — Thu, 13 Mar 2008 16:28:17 -0800

I may not have made it clear that I'm not actually investing my own money, nor is my boyfriend, but he is in the business of investing other people's money who have made the decision to do so for their own reasons.

This raises so many red flags for me that I can't see through them. He is going to invest other people's money in something he doesn't understand the ins and outs of? There's gotta be some sort of legal exposure for doing that. I'd be very, very careful.

By: ch1x0r

ch1x0r — Thu, 13 Mar 2008 20:40:04 -0800

This raises so many red flags for me that I can't see through them. He is going to invest other people's money in something he doesn't understand the ins and outs of? There's gotta be some sort of legal exposure for doing that. I'd be very, very careful.

It just makes me wonder... where do I find these suckers? Is he cold-calling people with dementia?

The real answer to this question is: not on the internet. Seriously. Give those people their money back and suggest that they find real investment firms or else stick to the various funds out there.

By: bystander

bystander — Fri, 14 Mar 2008 04:27:58 -0800

Listen to Mutant.

By: laukf

laukf — Fri, 14 Mar 2008 15:12:21 -0800

Your boyfriend might enjoy reading Hot Commodities by Jim Rogers - which charts a number of reasons for the current bullet market in metals. He is keener on soft commodities than gold / copper et al.

For gold I have a account with Bullion Vault. As other posters have mentioned leverage is double edged sword - too much and you are pretty certain to wipe. Good luck to him and you!