SILV - 3 Best Silver Investing Strategies for 2020
The silver price could increase by 100 to 200 percent per year once a bull market begins, with the gold-silver ratio declining to 20 or lower, according to Jeff Clark of GoldSilver.
“Will there really be a silver price shock? If there’s a financial shock — yes, because investors will turn to gold and silver,” the precious metals analyst said during his presentation at this year’s Vancouver Resource Investment Conference.
He added that some of the factors that could drive that financial shock include derivatives associated with the nine largest banks, global debt, US corporate debt and private debt.
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Silver prices have increased year-to-date, following gold’s path as expected, but how should investors play their cards in this space? Clark gave three strategies to profit during this season.
1. Buy physical silver
Clark’s first strategy for investors interested in the white metal space is to buy physical silver. “(Physical) silver is not boring, it’s beautiful,” he said. “Once you silver stack, you’ll never go back.”
He added that despite common belief, coins are not impractical and risk is lower than buying stocks.
“You will profit more than you know in a silver price shock,” Clark added.
2. Buy silver stocks
His second suggestion for potential silver market participants is to focus on the equities market, which is even smaller than the physical bullion market.
“Use more than one method to triangulate and figure out who is the strongest player in the market.”
He explained that investors should be looking at the right metal, in this case silver, and then go for stocks with the highest leverage and the strongest performance.
3. Create your own fund of silver stocks
Clark’s last silver investment strategy for white metal enthusiasts is to buy a large group of stocks in order to lower the risk of finding the “right one.”
“First we are going to try to buy developers,” he said. “That’s because they get rerated as they become a producer.” In his opinion, the second aim should be merger and acquisition targets, and that’s because they will have to do deals just to keep up.
As part of his presentation, Clark shared his own basket of silver stocks, which includes producers, developers and explorers.
From the producers, First Majestic Silver (NYSE:AG,TSX:FR) and Endeavour Silver (NYSE:EXK,TSX:EDV) made the list for Clark.
Looking over to developers, the expert included SilverCrest Metals (TSX:SIL,NYSEMERICAN:SILV), MAG Silver (TSX:MAG,NYSEAMERICAN:MAG) and Alexco Resource (TSX:AXU,NYSEAMERICAN:AXU).
Finally, for those interested in explorers, Clark mentioned Discovery Metals (TSXV:DSV,OTCQX:DSVMF).
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Alexco Resource is a client of the Investing News Network. This article is not paid-for content.