Asking for financial advice from strangers on the Internet... What could go wrong?
The thing to keep in mind Robert is that the final performance for this silver bull run is still years away. If you buy some stock now at 20 cents, for example and it drops to 10 cents in the next 6 months, it will not matter if you have committed your capital for at least 5-6 years. The pay off in the end will be a stock price in the dollars, not cents. If a company can mine and make a profit of $10 per ounce with silver at $27 an ounce. At $100 an ounce, the profit is 8 times more. Great for a bull run but destroys share price when silver prices fall by the same amount.
Just invest what you can afford. People don't blink to borrow $400,000 to invest in property. If you had the backbone to do the same thing with Silver Lakes Resources, for example, you will be a multi millionaire in 6 years time. Good luck getting the wife to stamp her approval on it though.
People were saying this 10 years ago when silver was over US$30/oz. Anyone who went long-term in silver stocks over the last 10 years would have lost most of their money.
Even the biggest gold company on the ASX, NCM is still -4% lower than where it was at in early 2011. It's taken 8.5 years to 'rebound' back to this level. Too bad if you bought in 2011, that's a huge time to have money tied away doing nothing. Opportunity cost....
As I was saying, over the last 10 years+, all the ASX silver-focused companies have done terribly - many went into administration. Those left, like SVL, have shareprices well lower than where they were 10 years, with their shares being continually diluted by capital raisings.
Some of the silver producing mines, like the Twin Hills Project (Texas, Qld) have had multiple companies go bankrupt trying to make it work. From memory, there was
Macmin Silver (administration),
Alcyone Resources (administration), now
Moreton Resources (MRV) is trying (formerly Cougar Resources which had a major under-ground coal gasification disaster in Qld). Google for all the problems with this silver project. These things are not straight forward to earn X ounces in year X for X amount of profit. More often than not that have major problems and retail shareholders get shafted.
The stock market is about managing risk, not about buying the right stock out of 2000+ companies on the ASX. If you buy and hold long-term, particularly with mining stocks, more often than not its Russian roulette, and you'll end up with some -50% or -90% or -100% investments within a few years.
Silver stocks 'may' do better over the longer-term at some point. Whats more important though, to be 'right' about long-term silver/gold predicitions, or to be trading stocks profitably. Many people seem to put more emphasis on ego, and end up loosing many 10s of $1,000s.
