Precious Metals Summertime Investing: Buying When Others Are Not
‘Sell in May and go away” is not good advice. It never has been good advice for most investors. Not for precious metals, and maybe also not for stocks. It certainly is not the best advice this year.
We all have heard the stock market adage ‘Sell in May and go away.’ It is predicated on the seasonal trends in stock market investors’ buying and selling patterns. It is bad advice, for silver and gold as well as stocks and bonds.
The reality is that there are seasonal patterns in investor buying of silver, gold, stocks, and bonds, and these seasonal patterns often lead to stronger upward price tendencies in the first four months and the last four months of any given year, with prices moving sideways to lower during the middle part of a year.
That said, selling in May is not the best advice. The best advice is to use the middle part of the year to regroup, reposition, and add to one’s investments. Buying silver and gold when others are looking the other way during a quiet period is smarter than chasing prices higher along with the crowd.
Bernard Baruch often was asked what the secret was behind his investment prowess and success. He would say, “Buy straw hats in the wintertime. Summer will surely come.” In other words: Do not chase investments higher but wait for them to be out of favor to buy at lower, better prices, understanding that higher prices most likely will follow.
Baruch was not alone in taking such a ‘value investor’ approach to investments. Warren Buffet has repeatedly said, “Be fearful when others are greedy and greedy when others are fearful.”
CPM is notorious for being . . .
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This CPM Group Market Commentary was produced for Silvercorp, one of the premier silver mining companies. We would like to thank Silvercorp for making this paid CPM Group research available free of charge.
