Silver’s Price Moves Are Affecting Investor Behavior

Wednesday, May 4, 2011

Silver’s quick and dramatic price shifts now are affecting investor attitudes. Poring through the many silver articles reveals a widespread investment strategy: Buy silver to protect against (profit from) U.S. inflation and a collapsing dollar.

Many are comfortable with that rationale alone. They believe that current U.S. government and Federal Reserve policies mean an inescapable decline (demise) of the U.S. currency. Others apply additional fundamental analysis, such as production shortfall implications and “undervaluation” based on a historic gold:silver price ratio.

Is the strategy a good one?

In investing, the answer depends on two components: The wisdom of the rationale and the price of the investment. In today’s market, the price is the rub.

This article is posted on SeekingAlpha.com.

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