The following is an excerpt from “The Morgan Report”, a newsletter written by David Morgan. This serves as a reality check for the far reaching effects of a market crash. Although gold and silver are looked at as safe havens, the words of wisdom below need to be remembered so that you are not scared out of your investments when the going gets rough. I’ve said it before in previous articles, surviving the future market will be as much about mental fortitude as anything. Prepare now!
This excerpt in from the Nov 2011 Morgan Report:
We saw this in 2008. When the economy stumbled, gold and silver both got whacked by the rush for liquidity, but silver dropped much more. If the economy falters again—or crashes more seriously—we’re likely to see the same pattern repeat itself.
Make no mistake: silver is going to get hammered.
I can’t say exactly when, or how hard, but unless we’re dead wrong about the economy, silver will take it on the chin.
But this is actually good news. It means silver will likely go on sale before heading much higher. If you believe this is true, you can look at sale prices as buying opportunities. This is, in fact, how you make money investing: Buy Low, Sell High.
Simple, right? Well, it sounds easy, but in practice, it’s hard to do. To really buy low, you have to buy what no one else wants—that means buying when there’s blood in the streets. To sell high means you have to sell what’s popular, when everyone thinks you’re crazy for selling. You have to be a contrarian. And that means you have to be so sure of your analysis that you’re willing to bet against the rest of the world.
So you must have courage. If you don’t have the intestinal fortitude to laugh and buy more if silver drops 50% and silver stocks drop 80%, stay out of this market—you get burned. If you do have the strength, then it makes sense to go long now, in case we see another good run upward and chances to make profits before the next big correction, or in case I’m wrong about the next big correction. But don’t go all in. Hold a good chunk of cash back, ready to deploy when the market melts down.
- Silver Saver now offers Gold – Invest Today (postamericana.wordpress.com)