Capital Gain or Dividend Yield

What type of investor you are depends on what type of investment return you are getting. Refer to everything you have invested or consider investing, very often they boil down to ONLY 2 types: capital gain or dividend yield (or sometimes both).

Capital Gain

Buy low, sell high would get you capital gain profit. When you identify an undervalue asset, you buy it with a low price, keep the asset for few years and then sell the asset at a higher price. Take your selling price minus your buying price, if that is a positive number, you are profiting from capital gain.

Silver investment falls into this category. Silver is an asset where you invest when the price is low and sell when the price is high. Typically, it takes a number of years for investor to achieve a minimum double digit profit (percentage) return. Take a look at an example of capital gain at work in silver history price.

silver price history

We won’t pick the bottom or peak because that is simply unrealistic. Assuming you bought silver in year 2009 at price $12 and sold your silver in year 2011 at price around $29. You are making a good profit of 140%. In other words, if you have put in RM10,000 into silver in 2009, your initial capital has become RM24,000. Such return is not too bad for 2 years of waiting.

However capital gains work in both ways. Any asset that involves capital gain will experience market cycle. Price will go up and price will come down. We call the cycle as bull market (price keep going higher) and bear market (price keep going lower).

current silver price

In this example, we picked a price at $34 in July 2011 and hold the silver for 2 years and here we are silver price at $20 in July 2013. We are experiencing a lost at almost 50%. In other words, if you have put in RM10,000 into silver in 2011, your initial capital has become RM5,000. It is a painful experience to make a 50% loss.

Anyone who bought silver in the past 2 years would have experienced bear market and the pain of capital loss. The good news is at the point of writing, precious metal is believed  to have bottomed. If you have bought silver in the past 2 years, now could be the turning point for silver. If you have not bought any silver, you should give serious consideration start buying small amount of silver especially gold silver ratio suggests current silver price is relatively cheap.

Dividend Yield

You receive dividend yield as return when you invest X amount of money and after a period of time, you receive Y amount of dividend (or some call Y as interest) – regardless what is the value of your initial capital. The financial assets that gives dividend yield includes fixed deposit, REIT and dividend stocks. Silver could not be categorized into investment that gives Dividend Yield because silver does not produce cash flow.

Some investors are consistently buying silver in bulk at a low price and selling the silver with a profit margin. That gives the investor cash flow. However, I would not view this as investment gain (dividend yield) because this involves certain amount of labour wiork, which is more appropriate to be view as running a trading business.

Summary

Silver is a simple investment where you profit by buy low, sell high. If you are looking for an asset that you can buy at low price now and sell at higher price in the future, silver is one of the most undervalue assets in the market. Remember, in order to sell high, you first need to buy low. Nothing is going to happen if continue sitting at the side line watching without taking action.

Silver Malaysia eBookIn the eBook: Practical Guide For Investing Silver In Malaysia I discuss 4 strategies you can use immediately to help you achieve capital gain in silver investment. The 1st strategy is designed for beginner. 2nd & 3rd are for average investors. 4th are for the pros. Click here to find out more.

What The Chinese Are Buying?

Due to significant price price drop for precious metals (gold and silver), people around the world are massively buying up both gold and silver at such good price. Take China as example, on June 11, almost 10,000 people line up in front of a gold shop to buy precious metal. The buyers lined up during the three day Dragon Boat Festival.

Gold Line 2_0 Gold Line 4_0 Gold Line 5_0 Gold Line 6_0

While the PAPER price of gold and silver may have dropped nearly 25% this year, it’s clear that PHYSICAL demand in the real world is soaring.

Gold and silver tend to trade together, however the demand for these two metals is quite different. The biggest demand driver for silver is its industrial use. While gold is driven by investment demand from both private citizens and central banks. Demand for industrial silver uses in electronic devices (such as smart phones, air-conds, TV, computers, etc) is increasing. Demand outlook for silver is better than the demand outlook for gold.

While gold is roughly double its nominal high of $850 in January 1980, silver is still barely below half its nominal high of around $50 an ounce set in 1980 and April 2011. That makes the white metal affordable and such a bargain for the average investor looking to protect the value of his wealth.

eric-sprott

Eric Sprott, the billionaire Canadian investment guru, recently said:

“I think silver will be the investment of this decade whereas gold was the investment of the last decade. Silver will outperform gold. I believe silver will trade down 16:1 ratio to gold…Your return will be 300% more. If you have the patience and can stomach the volatility, I think silver will by far be the better investment going forward.”

In the first 5.5 months of 2013, U.S. Mint sold more than 23 million American Silver Eagle bullion coins. That’s the first time ever the Mint has sold this many coins so early in the year, setting a record in the 27-year history for this coin. If price continues to stay this low, sales is expected to exceed historical high in 2011. Do note that this is the data for 1 coin ALONE –  American Silver Eagle.

silver-prices-investment-demand-chart

The reality is, coin dealers both across the U.S. and locally in Malaysia have been regularly selling out of their inventories, desperate to get new allocations. Find out more about the physical silver shortage in Malaysia.

Silver prices ended April down $4.14 an ounce, or 14.6%, at $24.42 an ounce, marking the third consecutive month of declines. The metal was little changed in March, trimmed by just $0.10. In February, silver shed $2.92. In January, it gained a modest $1.12.

However, do not get overly concerned on short-term fluctuation in paper silver price due to economic noise. I personally treat it as a great buying opportunity when price is low. Silver is an industrial metal first, precious metal second. Two third (2/3) of the annual physical silver supply went to feed industrial demand. Industrial demand requires physical silver, while the fluctuation of price is paper price. Get it? The demand for physical silver continue to be expected as strong in the coming years:

silver-prices-industrial-chart

Global industrial consumers typically don’t hold large reserves of silver thanks to just-in-time supply in production practices. A huge rush in orders could trigger a silver industrial supply shortage. Earlier this year rumors swirled that Apple  iMac “production problems” were actually tied to a silver shortage. Apple’s iMac and iPad screens use more silver than the older models.

Silver Malaysia eBookTo find out more about silver investment in Malaysia, take a look at the eBook: Practical Guide For Investing Silver In Malaysia

The Truth

Have you watch the video? Please watch. “The Truth” is a highly awakening video everyone should watch. Really.

If you are now in certain form of debt (including credit card debt, personal loan, car loan, Ah Long debt, or any other creative debts), this did not happen by chance. The global monetary system is designed to get you into debt. The more debt you have, the more powerful “they” have over your life such as indirectly forcing you to cling to your job. When it comes to money, nothing happened by chance. The truth is, EVERYTHING is there for a reason and the reason is usually NOT benefiting you. Monetary system could simple if you understand how it works; but if you don’t, I recommend you take your time to look at these FREE educational videos I have compiled over long period of time.

Last week, I shared Rio Tinto’s Kennecott which contributes to US 16% annual silver production has landslided. This mine will likely shut down production. 5 million oz of annual silver supply (and 500,000 oz of annual gold supply) is vanished.

This week, I will share with you more precious metal mines are closing down due to the recent crash of silver (and gold) price. For the miners, it is simply not worth the cost to bring out new metal when the production cost is higher than the gold & silver price they can sell for.

1. Drumlummon Mine, United States

Miners drill holes on a grid pattern in the Drumlummon mine in 2010

Miners drill holes on a grid pattern in the Drumlummon mine in 2010

U.S. Silver & Gold is shutting down its historic Drumlummon mine because it costs more to produce an ounce of gold than it’s worth, the company announced on April 24, 2013.

During the first three months of 2013, the mine near Marysville produced just over 2,100 ounces of gold at a cost of nearly $2,300 per ounce. At the point of  the announcement, gold price was only $1,431. To put this into simple  layman terms, no businessman would want to continue an operation that requires RM2.30 to produce a product that can only be sold at RM1.40. Fair?

2. Pascua Lama, Chille

Pascua Lama

Pascua Lama is supposed to bring 700,000-800,000 oz of gold and 35 million oz of silver annually. Barrick (the company) is considering permanently suspending the Pascua Lama project. Barrick CEO, Jamie Sokalsky said “we are working to address the environmental and other regulatory requirements on the Chilean side of the project“. Do note that the shut down of Pascua Lama is due to environmental issue rather than silver & gold price crash. However, this would impact the global supply of physical gold and silver severely.

Knowing that for every 100 oz of paper silver being traded, there is only 1 oz of physical silver back them. For every 1 oz of physical silver that you buy at current suppressed price, you are making the silver manipulators to walk on a thinner layer of ice and helping to bring silver back to their true value.

Silver short term price movement might not be too exciting. Last week, I shared that silver price is “potentially” going to $20 within the next few weeks. Of course, do not know for sure if that would happen. But I will share with you what I observe:

Descending Triangle is one of the patterns in Technical Analysis. We draw one trend line that connects a series of support and a series of high. Once the breakdown occurs, the price is potentially going lower.

Descending TriangleHere is how silver price chart looks like:

Click on image for full resolution

Click on image for full resolution

How low would it go? I do not have the answer. However, during such suppressed price, I see it as an great opportunity to buy silver at undervalue price.

The MOST interesting part about our current situation is, regardless how low silver price, you might NOT be able to buy physical silver. Click here to see some proofs of physical silver shortage happening in both our Malaysia local silver stores and other silver stores in overseas.

Assuming that there is silver, premium (which contribute to the final purchase price) is much higher than it used to be. The premium for silver bullion is being updated 2 to 3 times in a week. The disconnection of silver spot price and physical silver is obvious and getting wider. Right now in US (a matured silver marketplace), it has been reported that some dealers are charging premium of more than 25%.

Looking at the silver chart earlier for the potential downtrend. This could be just the beginning. So, EVEN if silver price drop to $11, PHYSICAL silver might be selling at $30, $60, or even $100. In fact, I would be worried for you if you could still find silver at that time.

Silver Malaysia eBookTo find out more about silver investment, take a look at eBook: Practical Guide For Investing Silver In Malaysia. You will find out where I personally buy my silver from and my review on the dealers.

Malaya “Banana Money”

Last week, Cyprus banks opened for the first time in almost 2 weeks of “forced-close holiday“. The Central Bank of Cyprus imposed a €300/day limit withdraw limit and restriction of transferring money outside the country. If you have no idea what is happening in Cyprus, visit here (a simple explanation of the situation).

The previous proposed tax was 3% tax on deposits below €100k, 6.75% on those €100 – €500k and 15% on those more than €500k. In my previous article, I mentioned:

…The reality is, the government can steal as much as they want….

In the latest discussion in Cyprus, bank accounts exceeding €100,000 ($128,000 or RM397,000) will be taxed at 60% with the reason of saving the country from bankrupt. The remaining 40% amount of cash will be frozen to ensure the liquidity of the country. For example, if you have RM400,000 in Cyprus, RM240,000 (60%) will be taken away by the government while RM160,000 (40%) will be frozen until further notice.

Cyprus Bank

Instead of as earlier proposed STEALING 15%, the government decided to ROB 60% of the deposit money and then said, you can’t touch the remaining 40% because the government said so. Sorry, you don’t have an option to disagree, you only accept it. Depressing? Unfortunately, this is the reality in Cyprus.

This is an extremely important financial event in the history. Never in the financial history such “legal robbery” has happened to the people. It is a matter of time, the people  will wake up and riot at streets and tell the government “who the hell you think you are to rob us?!”

What’s next? Cyprus very likely will continue restricting transferring money outside the country. Cypriots will be withdrawing the fiat currency and spend within the country like crazy with the mentality “If I don’t spend it, government is going to take it“. Hyperinflation is on it’s way hitting Cyprus.

Similar event has happened to Germany after World War 1. Hyperinflation hit Germany between 1921 and 1924. Due to war spending, Germany has printed massive amount of fiat currency that caused hyperinflation. The effect started to hit the middle class and everyone spent as fast as they could. Hyperinflation is never a funny matter. It is not about Nasi Ayam increased from RM4 to RM5. To put hyperinflation into Malaysian perspective, 2 years back if we could buy a bread with RM0.50 and then in the next 3-4 years, the same bread will cost RM201 Billion.

German Mark

Germany was fighting a war with weapons; while Cyprus is fighting a war with financial instruments. Unfortunately the financial war is now invisible and most people do not even realize it is here.

Too drastic to happen in Malaysia? 70 years ago, Malaysia have it’s own version of hyperinflation through “Banana Money” issued by the Japanese during their occupation of Malaya between 1942 and 1944. In order to supply the ruling authorities with money whenever needed, they simply kept printing more and more banana notes.

banana-money

During time of financial uncertainty, gold and silver remain as the best option to store one’s wealth. Not only gold and silver price will shoot up during such crisis time, but also the government cannot steal your gold and silver. (Remember, if you don’t hold it, you don’t own it) Between gold and silver, silver has much better potential than gold. Apart from the precious metal status (like gold), silver has an additional demand in industry usages. Computer, smartphone, air-cond, TV, battery, RFID, and much, much more. Almost every electronic devices uses silver as silver is the best electrical conductor in the world. The anti-bacteria element also made silver highly demanded in medical usage. To discover more silver industry usages, please visit here.

The total physical silver owned by ETP Silver Holdings continue to go up:

etf

For individual silver investors, I highly recommend you start buying some silver coins, bars or even rounds. There will be short term fluctuation of silver price, which I call them as “market noise”. For most people, it’s NOT worth the effort to pay too much attention to.

silver-eagle

American Silver Eagle coin is one of the favorite coins I keep (a lot!). Beside the beautiful design and low premium, I like the constant reminder of ONE DOLLAR minted on the coin, where right now the market is selling the coin for about $30 (RM100 – RM120, depending on the quantity and which dealer you buy from). This coin could once be bought at merely $1. It’s a perfect example / effect of inflation that pushed silver price up to such height.

Typically, investment grade silver in Malaysia can be categorized into coin, bar and round. For beginner, I highly recommend you start with American Silver Eagle which has many advantages over the other silver items in the market. The size is reasonably small where most middle class can afford to buy / invest. The premium is relatively low compared to other numismatic coin (which means you get more silver for every Ringgit spent), yet the coin has an impressive design. It is one of the most common and most demanded silver coin in Malaysia, in fact it is the best selling coin the world!

Silver Malaysia eBookPractical Guide For Investing Silver In Malaysia is an eBook specifically written with a Malaysian’s context for silver investment. You will learn different strategies and tricks you never thought of in silver market. Please click here to find out more.

 

Silver Industrial Application

Both gold and silver are precious metal and played important monetary role in the history. The primary difference between gold and silver is the industrial application. Gold is mainly being keep safely by the central governments and banks while silver is being consumed in the industry. Each year more gold will be added to the global inventory; while total amount of silver on earth each year is getting lesser.

silver-inventory

There are MORE THAN 10,000 known applications for silver. The following are some of the usages of silver:

Car

myvi-interior

Whenever you drive a car or sit in a motor vehicle, you are taking advantage of a number of the great uses of silver. Over 36 million ounces of silver are used annually in automobiles industry. Every electrical action in a modern car is activated with silver coated contacts.

Basic functions such as starting the engine, opening power windows, adjusting power seats and closing a power trunk are all activated using a silver membrane switch. While driving, silver-ceramic lines fired into the rear window. The heat generated by these conductive paths is sufficient to clear the rear window of frost and ice. Finally, the active ingredient in antifreeze is ethylene oxide, which is a compound made from silver.

Battery

silver-battery

In recent years, silver oxide batteries replaced the once-ubiquitous lithium battery. Silver cell batteries have power-to-weight ratios that outweigh their competitors. Many current rechargeable and disposable batteries are manufactured with silver alloys as their negative side or cathode. The most common silver oxide battery is the small button-cell battery used in cameras, toys, hearing aids, watches and calculators. Approximately 35% of the battery weight is silver.

Silver oxide batteries are beginning to replace lithium ion batteries in mobile phones and laptop computers – as silver is safer and more environmental friendly. A new and popular type of battery is the silver zinc battery. These feature a water-based chemistry and contain no lithium or flammable liquids. Due to health and safety standards and environmental concerns, silver’s role in batteries to be more important than ever in coming years.

Electronics

Electronics

Electronics are configured with silver. From turning out the lights to turning on your television silver is playing an important role, behind the scenes. Silver’s excellent electrical conductivity makes silver a natural choice for everything from printed circuit boards to switches and TV screens. CDs, DVDs and plasma display panels are also fabricated using silver.

Silver membrane switches are used in buttons on televisions, telephones, microwave ovens, children’s toys and computer keyboards. These switches are highly reliable and last for millions of on/off cycles. Silver is used in conventional switches such as controlling room lights.

Silver-based inks produce so-called RFID tags (radio frequency identification) antennas used in hundreds of millions of products to prevent theft and allow easy inventory control. They are also used in Touch ‘n Go (toll).

In Summary, new silver demand in 2010 was only 10 million oz per year. It is expected by 2015, the new demand for silver will be MORE THAN 45 million oz per year. Current and future silver industrial application can be broken down as following:

silver-future-application

In Practical Guide For Investing Silver In Malaysia (3rd Edition), you will DISCOVER how to invest in the most undervalue metal in this decade. With this complete guide, you will be able to invest in silver confidently and avoid many costly mistakes.

Silver Shortage

I have been yelling about silver shortage in my blog. Even in my recent radio interview with BFM (89.9) I could not stop emphasizing how industry has been using up physical silver and when silver is used up, it is gone forever. Apparently the reality of silver shortage is not too far away from us.

American Silver Eagle

American Silver Eagle Sold Out

American Silver Eagle (ASE) has always been my personal favourite coin. It is a very beautiful coin selling at low premium. I could get it easily anytime I want but I’m afraid things have started to change…

  1. On 17th December 2012, US Mint informed authorized purchasers that ASE 2012 had sold out and no additional ASE 2012 would be struck. The new coin ASE 2013 is only available for order on 7th January 2013 onward.
  2. On 7th January 2013, US Mint announced 3.937 million Silver Eagles were sold in a single day. This is the highest sale in the single day history!
  3. On 8th January 2013, US Mint sold another 300,000 oz of physical Silver Eagle coins. It is expected that January 2013 would hit the highest sale per month in the history.
  4. On 17 January 2013, United States Mint is sold out for 2013 American Eagle Silver coins. As a result, sales are suspended until they can build up their silver inventory.  Sales will resume on or about the week of 28th January 2013.
  5. The week of 28th January 2013,  all the authorized dealers are queuing for another massive round of Silver Eagle coin order!

Apple iMac Delay

imac

Apple announced the new iMacs on 23rd October 2012. The new model uses a lot more silver on the new Iris screen (which is much brighter) compared to the older models. In January 2013, Apple could not supply enough of this model.

“There is simply not enough silver available to produce them”, Bally A. said. The brighter screens require substantially more silver than the earlier models. That is also why there was a $100 price increase on most models of the iMac, he added.

A 3-month delay after the announcement has never happened before in Apple history! No business will ever tell the public what exactly went wrong within the business. Apple only addressed this as “production problems“. Well, common sense, it does not take 3 months to handle any “production problems“. If a problem continues for 3 months, it is very likely to be an external factor that is out of Apple’s control. Silver shortage fits perfectly into such “production problems“.

Do you know what is more interesting?

Apple manufactures their iMacs and iPads in China. China being the 3rd largest silver producer in the world yet, China does NOT have enough silver and have to import more silver from other countries!

(You can check out more about China Silver Market here.)

SLV Purchased 572 Tons of Silver

iShares Silver Trust (SLV)

On 17th January 2012, there is an unconfirmed report that SLV purchased 572 tons of silver. SLV is silver exchange-traded fund (ETF) in the US. It is also the largest silver ETF in the world. In layman term, it is called Paper Silver. Similar like Maybank Silver Investment Account, you can never demand delivery and you can never get your physical silver. You just have to assume they have all the silver they claim to have sold you.

SLV claimed they have bought 572 tons of silver. What is happening here? Two scenarios:

  1. They claimed they have bought 572 tons of silver so that they can sell more paper silver to the market. Why do they want to do that? Are they are expecting a huge increase in silver price soon?
  2. Let’s assume SLV did purchase 572 tons of physical silver, that means the world has 572 tons less physical silver for average investors like you and me to purchase. Economics 101, the lesser supply of silver, the higher silver price will rise!

I intentionally discuss both physical silver and paper silver. The reason is I want you to see the difference. When Silver Eagle coins are sold out by US Mint and when Apple needs physical silver to make iMacs, what is the point of holding paper silver that the private organization can print out anytime they like? Give the paper silver to Apple to get them start manufacturing? Give the paper silver to US Mint to get them start minting more coins? Whether or not the physical silver shortage has started, we will soon find out from the market.

I have personally bought enough physical silver. I have started buying silver since 2010. Today, I continue buying silver every month or whenever I have spare cash. I pay close attention to Malaysia silver market so that I can grab undervalue deal whenever it comes. Thanks to all the research I have done and the personal experience I have, I can tell which silver is suitable for investment or not. I know Malaysia silver market well enough to have helped many Malaysians started their silver investment journey. You see, keeping the information to my own advantage is selfish. That’s why I have written the eBook Practical Guide For Investing Silver In Malaysia to share with Malaysians.

In the eBook I’m going to guide you step by step and you are going to learn how to buy your 1st oz of silver. If you are a big boy and want to invest 1000 oz, I will show you how to buy from the cheapest source. Click here for the A-Z guide in Malaysia silver investment.

The People’s Metal (Ryan Jordan)

With silver at $50 per ounce in 1980, all of the world’s silver equaled the U.S. monetary base. However, at today’s prices, in order to be equal to the U.S. monetary base, silver would have to trade for over $1,000 per ounce! -FutureMoneyTrends.com, December 2012

 

 

Practical Guide For Investing Silver In Malaysia is the no. 1 eBook to show how Malaysians can make the most return out of silver investment. You will learn the tips and tricks for investing in silver. If you are serious about silver investment, click here to find out more.

Property vs Silver

Property investment is a favorite subject for investors in Malaysia. Many investors have made good profit from property for the past few years and even more are desired to be part of the game. Property is the ultimate investment tool. Not only property provides cash flow but also capital appreciation that works for investors in passive manner. If you compare property with any other investments, property always comes out as the overall champion. So, how does property compare with silver?

Let’s compare property with silver in 3 different aspects:

Cash Flow

Property is a great tool to receive cash flow. Fundamentally good properties always have high rental demand and yield very good cash flow. The best thing a property investor could do is to divide a large apartment (or a double storey house or shop lot) into many partitions and start renting them out to maximize rental return. It is always more profitable to rent out smaller rooms than renting a property as a whole. The downside is, it is more work to rent separate small rooms compared to a whole unit. In silver, cash flow is almost non-existence. A silver investor do not receive any cash flow no matter what silver he invests in. There are precious metal investment programs that provide “interest” or “dividend” or any other forms that carries the similar meaning, but that often doesn’t end up well. In silver investment, the only exception that provides cash flow is to start trading silver as a bullion dealer. You buy a piece of silver for RM120 and resell it for RM135. That is a cash flow of RM15. Some might argue that is running a trading business and it’s not a investment. Well, renting out a property requires certain amount of work too such as renovation, arrangement for furniture, finding tenants, collecting rental, up-keeping maintenance, etc. In both property and silver, it depends on how much effort the investor wants to put in order to receive the cash flow.

Capital Appreciation

Both property and silver provide capital appreciation. For property, since 2008 till date, price has increased significantly. There is no absolute number to measure how much property price in Malaysia has increased as different locations, different types of property, or even different units of property in the same project might face different capital appreciation return. In property investment, there is also difference between asking price (the price that the property agent / owner wants to sell) and transacted price (the price that the new buyer bought it for) hence it is really challenging to provide an exact number how much property has appreciated since 2008. However if anyone has been following the increase of property price, it’s totally not surprising to find out property price has increased for anything between 100% to 150% since 2008. On the other hand for silver, since November 2008 until November 2012, silver price has increased approximately 200%. It is much easier to measure the appreciation of silver price by tracking silver spot price but nevertheless there are different type of premium for silver.

Leverage

In investment sense, leverage often means using OPM (other people’s money). In property investment, an investor has leverage of 1 to 10 ratio. Example, a person has RM20,000 can buy a RM200,000 property by borrowing the remaining 90% from the bank. Banks love to borrow money for property buyers as the loan is backed by a physical asset.  If you understand how a home loan works, banks charge the maximum interest in the early years and ONLY allocate your repayment to knock off the principle portion at the end of the loan tenure.

Any “misbehave” while serving the loan (such as defaulting payment for 3 months), the banks have the rights to raise your interest from -2.4% BLR to +2.5% BLR. If we take today’s interested rate at 6.6% and you are getting a -2.4% BLR, your actual interest rate is 4.4% (6.6% – 2.4%). If for whatever reason you could not pay the installment for 3 consecutive months, the bank could increase your interest rate +2.5% BLR which is equivalent to 9.1% (6.6% + 2.5%). From 4.4% to 9.1% in a more layman perspective, that means if you take a loan of RM200k for 30 years at 4.4% interest, you are paying approximately RM1000 as monthly installment. If for whatever reason the bank increases the interest rate to 9.1%, your installment will now be slightly more than RM1600. From another aspect, if your property value appreciate for 10% from RM200,000 to RM220,000, you are making 100% return from your RM20,000 down-payment. However when your property value depreciate for 10% from RM200,000 to RM180,000, you are making 100% lost on your RM20,000 down-payment. When that happens, really quiet a tough situation to be in. Leverage is a double-edges sword, it can cut your enemy, it can also cut you.

For silver, leverage is again almost non-existence. There is no bank that will borrow you to invest in silver. Well, when there is a will, there is a way. You can take a personal loan or use over-draft facilities to buy silver, but that is highly not recommended. The fluctuation in silver price is too huge to use a loan to invest for one simple reason: the interest on the loan is a constant (fixed) while the return is unknown. Silver price could go up and come down in different time of a day. There is no benchmark for silver price movement. Taking a loan to invest in property is a calculated risk (if you know what you are doing), but taking a loan to invest in silver is purely putting yourself in risk that has no form of systematic way to calculate the risk vs return. It’s just pure risk. This act is comparable to gamble away your money in Genting Highland!

Summary

It is rather challenging to define a clear winner in investment. However if we look into the minor details, property often comes out as the overall champion. So, why are we still looking into silver investment? No doubt property is the ultimate investment tool, the reason why we are talking about silver investment is because the cycle that we are in right now. The cycle for property is almost over, transaction is low, appreciation is not growing as the previous years, prices has gone way above affordability level. Silver on the other hand has tremendous upward potential, affordable where every middle class can afford to buy 1 oz of silver every month, and silver has strong physical demand in both industrial usage and investment demand.

Practical Guide For Investing Silver In Malaysia is a non-bias eBook written by Malaysian to Malaysian to show you why silver investment is such a great option and how to invest silver in Malaysia to maximize your profit, click here to find out more.

Free Silver Report, Adolf Hitler & War World 3

For this week update, I want to share the following 3 resources with you:

Item No.1: Free Report: The Outlook For Silver Industrial Demand. It is a 15 pages free report provided by Silver Institute published in November 2012.

  • You will learn the Economic Outlook
  • You will learn silver industrial demand outlook.
  • You will know the role of silver in industrial items such as cars, solar panels, computers, televisions, iPhone, iPad, etc and silver the world has been consuming
  • You will know what are the countries have been buying silver for the past 8 years.
  • and a lot more…

Click here for your free download now!

Item No. 2: Mike Maloney vs Adolf Hitler video. A funny video on the greatest wealth transfer in human history spoken by Mike Maloney has finally come true. The story started by Robert Kiyosaki lend money to Mike Maloney to cut off key silver supplies by taking over coins shops in certain areas…

As David Morgan has spoken, the real potential of silver will only come at the last 10% of the time of bull run. This videos showed Hitler was trying to manipulate the silver price through technical analysis but unfortunately silver price manipulation could no longer manage the price. In my eBook: Practical Guide For Investing Silver in Malaysia, this situation is described as “wrapping fire with paper“, the manipulation cannot go on forever and when paper can no longer wrap fire (silver price manipulation get exposed), silver price will shoot up to a new level.

Item No. 3: War World III Simulation. When Israel started attacking Gaza, the conspiracy of War World III has again came back. This video produced by FutureMoneyTrend.com simulate what the world is going to look like if War World III actually happens.

Interesting in the video is gold, silver and oil are being mentioned again and again.

If you want to invest in oil, you cannot be storing a tank of oil in your apartment, your only option is paper oil. Some investors argue they do not like paper asset during crisis, hence the option is left with gold and silver. It is an obvious indication that during the time of crisis, everyone would run to precious metals which are gold and silver to protect their wealth.

Between gold and silver – where both of them are precious metal, silver is a much greater option to put your money in for one simple reason. Gold has value mainly due to people believe gold should have value. It is only about perspective. While for silver, apart from being recognized as real money for 4000-5000 years of history, silver also has real industry demand. The silver available on ground has dropped more than 93% since 1950. While the supply for gold has increased more than 600% since 1950. Gold is mainly being hoarded (kept in somewhere, not being used) while silver is being consumed by industrial demand.

Please download this free report to understand how great the demand for silver is. When industrial-demand consumes more and more silver each year and supply is not picking up, physical silver price will explode. A very good example to illustrate is whenever 1oz of physical silver is being mined, that 1oz is being traded approximately 100 times in COMEX (paper market) before being put for physical use.

This is how little silver there is left to be owned by investors. Put at least 15% to 20% of your money into silver before the silver bull run starts. Good luck investing! Until next week.

In Practical Guide For Investing Silver In Malaysiayou will learn step by step how to invest silver in Malaysia to maximize your profit. In the eBook, you will learn the exact strategies and the safe places to buy your silver from. Click here to find out more.