Investing in Gold & Silver For Dummies / <br> Paul Mladjenovic.

Includes index.

Introduction 1 About This Book 1 Foolish Assumptions 2 Icons Used in This Book 2 Beyond the Book 3 Where to Go from Here 3 Part 1: Getting Started with Gold and Silver 5 Chapter 1: Exploring the World of Gold and Silver 7 Considering Gold and Silver for Your Situation 8 Assessing the world’s financial issues 9 Knowing how gold and silver can help you 9 Taking Action Before You Invest in Gold and Silver 10 Reviewing your portfolio 10 Boosting your cash position 11 Using your talents in your spare time 11 Doing your research on gold and silver 11 Chapter 2: Understanding Gold and Silver’s Greatest Benefit 13 Looking at Counterparty Risk in Today’s Investments 14 Stocks 15 Bonds 15 ETFs and mutual funds 16 Cash and bank investments 17 Real estate 18 Futures and options 18 Bitcoin and other cryptocurrencies 18 Knowing That Gold and Silver Have Risks, Too 19 Chapter 3: Adding Gold and Silver to Your Portfolio Mix 21 Defining Saving, Investing, Trading, and Speculating 22 Saving 22 Investing 22 Trading 23 Speculating 23 Building Your Financial Profile 24 For the conservative investor 24 For the growth investor 24 For the speculator 25 For the trader 25 Making Other Portfolio Considerations 26 Deciding on a percentage to put in metals 26 Choosing gold, silver, or both 27 Investing for income 27 Chapter 4: Recognizing the Risks 29 Exploring Different Kinds of Risks 31 Physical risks 31 Market risks 31 Futures exchange risks 32 Political risks 33 The risk of fraud 34 Minimizing Your Risk 35 Gaining knowledge 35 Being disciplined 36 Having patience 36 Using diversification 37 Keeping some risk management tools in your arsenal 38 Weighing Risk against Return with the 10 Percent Rule 39 Part 2: Spanning the Gold and Silver Landscape 41 Chapter 5: Investing in Gold 43 Comparing Gold to Other Investment Assets 44 Gold versus the financial world in general 45 Gold versus stocks versus currencies 46 Understanding the Gold Market 47 Gold demand 47 Gold supply 49 Going Over Gold’s Recent Bull and Bear Markets 49 The 1970s bull market 50 The 1980s bear market 50 The 1990s range-bound market 50 The bull and bear markets of 2000–2008 51 The bull market and bear market of 2008–2018 51 Making the Case for Gold Today 52 Chapter 6: Surveying Silver 55 Comparing Silver and Gold 56 Silver’s similarities to gold 56 Silver’s unique qualities 56 Digging into the Silver Market 57 Silver demand 58 Silver supply 59 Future drivers of silver 61 Starting with Silver’s Modern History in the 1970s 61 Picking Apart Silver’s Performance during 2000–2020 62 The first silver bull market (2000–2008) 63 The bull market of 2009–2011 and the bear market of 2011–2018 63 Silver versus the financial world in 2020 and beyond 64 Resources for Informed Silver Investors 66 Chapter 7: Making the Most of Mining Stocks 69 Examining the Essentials of Stock Investing 70 A profitable company 71 A growing industry 72 A healthy balance sheet 73 Knowing What to Look for When You Evaluate Mining Stocks 74 Value that isn’t cheaper than dirt 74 Management that you can dig 75 Politics: Not in my backyard 75 Distinguishing Different Types of Mining Stocks 76 The majors 77 Midtier mining companies 77 Junior miners, eureka! Exploratory companies 78 Considering the Risks of Mining Stocks 78 Boosting Your Returns 79 Generating income 79 Leveraging with warrants 80 Checking out mining stock indexes 82 Spotlighting the Pros 83 Rick Rule 83 Doug Casey 84 Chapter 8: Examining Mutual Funds and ETFs 85 Choosing Mutual Funds 86 The advantages of mutual funds 86 The downside of mutual funds 89 Keys to success with mutual funds 92 The prospectus: Netting it out 93 Mutual fund resources 94 Selecting Exchange-Traded Funds 94 The pros and cons of ETFs 95 The world of precious metals ETFs 96 Other ETFs for the metals-minded 97 ETF resources 98 Part 3: Looking at Other Gold and Silver Investing Vehicles 101 Chapter 9: Going Direct: Buying Bullion 103 Weighty Matters: Troy Ounces 103 Making the Case for Physical Ownership 104 What could go wrong with paper assets? 105 Bullion versus numismatics 106 The risks of owning physical metals 107 Going for Gold Physical Bullion 108 American Eagle Gold Bullion Coins 108 The American Buffalo Gold Bullion Coin 109 The Krugerrand 110 The Canadian Maple Leaf 110 Other gold bullion 111 Seeking Out Silver Physical Bullion 112 American Eagle Silver Bullion Coins 112 One-ounce rounds 113 Junk silver bags 113 The $1,000 bag of silver dollars 114 The 40 percent silver bag 114 Silver bars and ingots 115 So what kind of silver is best? 116 Gold and Silver Commemorative Coins 116 Bullion Costs, Fees, Dealers, and Resources 117 Chapter 10: Numismatic Coins and Collectibles 119 Understanding the Basics of Numismatic Coins 120 Aiming for profitable coin investing 120 Making the grade 121 Checking out information sources 122 Considering Collectible Coins 123 Gold coins 123 Silver coins 124 Other coins 125 A special category: Commemoratives 126 Exploring Coin Organizations and Services 126 Information sharing 126 Grading services 127 Selling Your Coins 128 Potential buyers 128 Pricing information 130 Chapter 11: Leveraged and Inverse ETFs 133 Feeling Bullish: Leveraged ETFs 133 Discovering what makes an ETF leveraged 134 Some advantages of leveraged ETFs versus futures and options 136 Checking out a real-life example of a gold and silver leveraged ETF 136 Feeling Bearish: Inverse ETFs and Inverse Leveraged ETFs 139 Using Leveraged and Inverse ETFs during the Market’s Ups and Downs 140 Bullish moves 141 Bearish moves 141 Other considerations 142 Looking at Resources for Leveraged and Inverse ETFs 142 Chapter 12: Focusing on Futures 145 Back to the Futures 145 How the futures market works 147 What can be traded as a futures contract 148 The Players in the World of Futures 149 The U.S exchanges 149 The international futures exchanges 150 Speculators 150 Hedgers 150 Regulators 151 The Fundamentals of Futures Contracts 152 A specified size 153 Specified quality 153 Specified prices 153 A specified delivery date 154 Metals Futures Contracts 154 Precious metals contracts 155 Mini-futures contracts 156 Pass the margin 156 Leverage: The double-edged sword 158 Basic Futures Trading Strategies 158 Basic strategy #1: Going long 159 Basic strategy #2: Going short 159 Basic strategy #3: Spreads 160 Using Fundamental and Technical Analysis with Futures 162 Futures versus Options on Futures 165 Futures Resources 166 Chapter 13: Considering Options 167 Discovering How Options Work 168 The call option 168 The put option 172 Placing Orders for Options 174 Options: Offering Something for Everyone 174 For those seeking gains 175 Income strategy #1: Writing covered calls 175 Income strategy #2: Writing puts 176 Minimizing Risks with Options 177 Trying Some Profitable Combinations 178 The zero-cost collar 178 The straddle 179 Checking Out Options in the World of Precious Metals 180 Options on mining stocks 180 An option with no expiration? 181 Options on ETFs and indexes 182 Options on futures 182 Following Golden Rules for Options Success 183 Consulting Options Resources 185 Part 4: Digging into Gold and Silver Investing Strategies 187 Chapter 14: Trying Out Trading Approaches 189 Like a Scout: Being Prepared 190 Be a voracious reader 190 Have your plan 190 Decide your market 191 Practice with simulated trading 192 Picking Out Your Vehicle 192 Selecting Your Trading Strategy 193 Choosing your market outlook 194 Stock trading coupled with options 194 Futures trading coupled with options 195 Trading the Gold-to-Silver Ratio (GSR) 196 Getting a little background on the GSR 197 Investing with the GSR 198 Trading with the GSR 198 Chapter 15: Using Technical Analysis 201 Defining Technical Analysis 202 Comparing Technical Analysis versus Fundamental Analysis 202 The guts of technical analysis 203 How about both? 204 The tools of the trade 205 Tracking the Trend 205 Trend lengths 207 Channels 207 Resistance and support 208 Checking Out Charts 209 Line charts 209 Bar charts 210 Candlestick charts 210 Point and figure charts 210 Picking Apart Chart Patterns 210 Head and shoulders 211 Reverse head and shoulders 211 Cup and handle 211 Double tops and bottoms 212 Triangles 212 Flags and pennants 212 Wedges 213 Gaps 213 Assessing Moving Averages 213 Simple moving averages (SMA) 213 Other averages 215 Investigating Indicators 215 Oscillators 215 The relative strength index (RSI) 215 Moving average convergence/divergence (MACD) 216 Crossovers and divergence 216 Bollinger bands 217 Focusing on the Short Term versus the Long Term 217 Resources for Technical Analysis 218 Chapter 16: Using Dealers and Brokers 219 Starting with Some General Points on Dealers and Brokers 220 Working with Gold and Silver Dealers 221 Sticking to major bullion coins 221 Investigating a dealer’s reputation and reviews 222 Getting at least three price quotes 222 Understanding ancillary charges 222 Deciding whether to get physical metals online or visit a local dealer 222 Picking apart a buy back policy 223 Getting the Scoop on Stock Brokerage Accounts 223 Beginning with types of stockbrokers 224 Assessing account types 224 Opening a stock brokerage account 225 Distinguishing Types of Orders 226 Stock brokerage services 226 Margin in a stock brokerage account 228 Introducing Types of Futures Brokers 230 Selecting a Futures Broker 231 Dealing with Futures Accounts 233 Seeing how margin works in a futures account 233 Watching out for problems in your futures account 234 Opening a futures account 235 Checking out futures account commissions and fees 236 Making futures orders 237 Considering managed futures accounts 240 Chapter 17: Tax and Retirement Considerations 243 Assessing Taxable Activity in Different Accounts 244 Regular investment accounts 244 Individual retirement accounts 246 Understanding Capital Gains and Losses 246 Looking at Tax-Deductible Activity 247 Surveying Special Tax Considerations 248 Gold and silver as collectibles 248 Tax rules for traders 249 Tax Resources to Keep You Up-to-Date 250 The IRS (of course!) 250 Helpful tax websites 251 An ounce of prevention 251 Adding Physical Precious Metals to an IRA 252 Precious metals allowed for IRAs 252 Companies where you can establish an account 253 Part 5: The Part of Tens 255 Chapter 18: Ten Reasons to Have Gold and Silver 257 Gold and Silver Provide Diversification 258 Gold and Silver Allow for Privacy 258 Gold and Silver Are Portable Wealth 259 Gold and Silver Ease Retirement Concerns 259 Gold Is a Safe Haven Asset 260 The Value of Gold and Silver Is Never Zero 260 Gold Retains Its Value in Bear Markets 261 Gold and Silver Have Enduring Demand 261 Gold and Silver Make Good Inflation Hedges 262 Gold Guards against Financial Bubbles 263 Chapter 19: Ten Ways to Add Gold and Silver to Your Portfolio 265 Major Gold and Silver Stocks 266 Junior Gold and Silver Stocks 266 Mutual Funds 266 Physical Metal ETFs 267 Bullion Coins 267 Numismatic Coins 268 Leveraged ETFs 268 Junk Silver 268 Gold and Silver Cryptocurrencies 269 Buying through Goldmoney and OWNx 270 Chapter 20: Ten (Or So) Tips for Gold and Silver Speculators and Traders 271 Focus on a Specialty 272 Do Research and More Research 272 Be a Contrarian 273 Limit Your Grubstake 273 Stagger Your Entry 273 Use the Right Speculative Vehicles 274 Have Multiple Positions 275 Use Technical Indicators 275 Do Some Hedging 275 Take a Profit 276 Use Brokerage Orders 276 Part 6: Appendixes 277 Appendix A: Resources For Gold and Silver Investors 279 Appendix B: Gold and Silver Investments 293 Index 299