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
