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From: rbg@cbosgd.UUCP (Richard Goldschmidt)
Newsgroups: net.invest
Subject: Re: Silver
Message-ID: <73@cbosgd.UUCP>
Date: Fri, 29-Jun-84 08:43:27 EDT
Article-I.D.: cbosgd.73
Posted: Fri Jun 29 08:43:27 1984
Date-Received: Sun, 1-Jul-84 06:14:41 EDT
References: <749@eisx.UUCP>
Organization: AT&T Bell Laboratories, Columbus
Lines: 25

The price of silver tends to vary with the prices of other precious metals
like gold, although the large industrial demand for it can sometimes also
be a factor.  The prices of precious metals are affected by a host of other
factors:  increasing interest rates make metals less attractive as an 
investment because of holding costs, margin and lack of return, while rising
dollars generally cause the price of metals to go down on international
markets.  Inflation is generally good for metal prices, and they are 
advertised as being a hedge on inflation.  There are a variety of studies
on long term cyclic behavior of metal prices, most of which are basically
oriented towards the issue of timing.  

   The issue of vehicle however, is also very important.  It is very 
easy for a small investor to get in way over their heads when investing in 
futures contracts, while buying the real thing leads to storage problems.  
Another possibility is to buy stocks or stock options of mining companies, or 
a mutual fund which specializes in the stocks of these companies.  
International Investors mutual fund has achieved an average return of about 
25%/year over the last 20 years investing primarily in gold mining stocks.
However, a lot of their investments are in South African companies which has 
both moral implications and potential political instabilities.  

   If you believe we are in for a long term inflationary trend, this is 
probably a relatively good time to buy.  

--Rich Goldschmidt    cbosgd!rbg