Hello TM,
Simple question but complex answer. What are your goals and risk tolerance? When in the cycle do you wish to enter and when to exit, i.e. how much cycle risk are you willing to shoulder in an effort to be rewarded for being "just in time."
Without having a lot of information about the individual investor, one can only generalize. We assume that, all other things being equal, (they never are) one wants to max the Reward/Risk ratio. Owning pure metal seldom achieves this. Leverage can be obtained both through shares and derivatives. I like options on Comex silver. Usually, options on the share are too thinly traded and floor traders play too many games at public's expense.
Shares do usually move ahead of metal price move. But this means both up and down. So, keep it simple and play the metal's price move so as not to get caught in a false start in equities. And yes, the market is more than a little tired of metals so we may need a very firm bullion rally to kick off shares.
My bias is, therefore, to position in options on silver futures in the coming weeks, looking for a seasonal rally in silver through Jan - Feb, 1999.
RH |
