Despite all the talk of the Dow making new highs over the last few years the truth is actually quite different. The way an index is “weighted” can make all the difference in how it looks. In addition indexes that change their composition regularly like the DOW (i.e.removing some companies and adding better performing ones) create an unnatural upward bias.
Silver investments have a sketchy past. Recently, it came to light that from 2007 to 2013 major players like JP Morgan Chase and HSBC, had been manipulating the price of silver. But that is not the first time the price of silver was manipulated. Beginning in the early 1970s, the Hunt brothers, Nelson, William and Lamar began accumulating large amounts of silver. Until his dying day in 2014, Nelson Bunker Hunt, who had once been the world’s wealthiest man, denied that he and his brothers had plotted to corner the global silver market. Whether they initially intended to “corner the market” or just believed in the ability of silver to protect against double-digit inflation is uncertain but by 1979, they had nearly cornered the global silver market.
In 1979, the brothers had made a profit of from $2 to $4 billion in silver speculation, with estimated silver holdings of 100 million troy ounces (3,100,000 kg). Because the Hunt brothers held the majority of the available above ground supply, silver prices soared from $11 an ounce in September 1979 to $50 an ounce in January 1980. However, like all bubbles this one popped as well, (in this case with the possible help of the government due to the difficulties caused by the lack of supply of silver) with prices falling back to $11 by March 1980. Eventually the Hunt brothers were forced to file for bankruptcy due to lawsuits related to their trading activities. Some see the endearingly eccentric Texans as the victims of overstepping regulators and vindictive insiders who couldn’t stand the thought of being played by a couple of southern yokels.
Even today, many investors still prefer to invest in gold rather than silver. However, 2017 is a shiny new year by many standards. Is this the year to buy silver?
Actions Speak Louder Than Words — If you want to know what someone really thinks about the stock market, look at their recent portfolio transactions. What can we learn from recent moves made by two of the world’s most respected value investors?
Total index investing today exceeds 4 Trillion dollars.Why has the share of index fund investing gone from basically zero in 1985, to more than 35% in 2016?
Gold has a strong negative correlation to other assets. That means that when other markets fall gold can hold steady or even rise. This makes it the ultimate portfolio insurance.
A retest of prior resistance may be in the cards, which is exactly what happened in early 1995. In 2016, the Dow Jones Industrial Average (below) may be in retest mode.
While the S&P 500 (SPY) was able to push to a new high during Monday’s trading session, the broad NYSE Composite Stock Index (VTI) was still looking for a close above an area that acted as resistance in the past.
Close to ninety percent of all traders lose money. The remaining ten percent somehow manage to either break even or even turn a profit — and more importantly, do it consistently. How do they do that?
That’s an age-old question. While there is no magic formula, Elliott Wave International’s own Jeffrey Kennedy has identified five fundamental flaws that, in his opinion, stop most traders from being consistently successful.
Justin Spittler, editor of The Daily Dispatch is talking with Crisis Investing editor Nick Giambruno. Nick shares two key markets he’s keeping an eye on today…