Your Questions About What Is Going On With The Stock Market Today

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David asks…

Is It Better To Buy The Actual Silver Bullion or Silver Stocks on the Stock Market?

Hi,…
I’m very New to all of this but the last time that I tried to buy Stocks in anything the people that I called wanted me to invest at the least $2,500 on up to $5,000 at one time and at that time I didnt have that kind of money to take that kind of risk with.

I dont know how it works today with you being able to buy Stocks over the internet as easily as you can and from my research I dont think that you can buy “Silver” as it is and that you have to invest in to a company that deals with Silver if I understood that correctly.

So is it better to just go out and search for who ever is selling Silver Bullion the Cheapest and Buy as much as you can afford to at that time and have the Silver Bullion directly in your hands or is it better to try and find a company that deals with Silver and Invest in to that company?

What about the cost of having to deal with a Broker or Fee’s that you have to deal with when your dealing with Stocks?

If there is someone out that that can help me and get me pointed in the right direction and possibly help me understand some of the things that I dont understand as far as actually buying Silver Stock,… I would very much appreciate your help friend.

Thank You Kindly.

Justin answers:

Buying silver through a brokerage firm has its own advantages and disadvantages. For example, you can sell it really quickly, if you need to. And you don’t have to worry that thieves will break in and steal your silver. However, your brokerage firm is required by law to report trading activity to the IRS, so if silver goes up 2500% and you sell it, the IRS is going to know exactly how much money you made. And you do not know what the capital gains tax will be in the future. So, it’s a gamble. LOL

If you buy the actual metal silver, the IRS has no idea how much you made on the silver trade. But the disadvantage of buying silver is that someone might break into your house to steal your safe. You have to guard your house. When you buy actual silver coins, you are paying a little bit more, that’s true. Coins are ALWAYS more expensive than raw silver–regardless of whether you’re trying to buy them or sell them. Of course, the coin traders will make a little commission both when you buy and when you sell it back to them. The commission usually depends on how much you buy. If you buy or sell a larger quantity at one time, you’ll pay SMALLER commission! The IRS works the opposite way: When you sell a lot of silver and you make a huge profit, you may find yourself in a higher tax bracket, and you’ll pay more $$$ to Uncle Sam. If you sell little silver at small profit, you’ll pay less.

I myself have bought actual silver coins. And you’ll have to shop around, because I have found that silver traders charge very different commissions. Some traders are trying to make a lot of money on each sale, and some of them only make a little.

If there would be chaos and the value of dollars would go down to virtually zero, we might be able to use the coins to buy stuff. So, I think, it’s a good idea to stock up on coins. 😉

Having said that, there are new funds that play with options to give you twice the return of the metal silver! So, if you open a brokerage account, you could buy AGQ, which is the double silver fund. When silver goes up 1%, AGQ goes up 2%. I do not know how long this fund is going to be around, but it is a very good thing.

Also, GOLD has a double ETF as well — DGP. So, if the price of gold goes up 1%, DGP goes up 2%. If you happen to buy these high performance funds at the wrong time, your money will fall at a much faster rate than if you had bought GLD or SLV. So, be careful.

Mark asks…

Stock market trading question..?

I have been learning technical/volume analysis now vigorously for the last couple months. I read over 5 books now so far and am still very confused about one very important detail they all fail to mention.. The MARKET.. I know how to find patterns in individual stocks that indicate a breakout has occurred (especially if on high volume) etc. but even if every last indication out there confirmed a perfect breakout and entrance point, when the market opens the next day.. the entire breakout pattern/volume indicators etc all mean absolutely nothing because the stocks do what the overall market does. Why do these pros that are teaching the stuff not focus solely on the market, because the individual stock don’t mean anything as far as I can tell. I had 4 PERFECT setups last night that I got into today and they all ended lower they opened, despite the high volume breakouts that were present. Instead of breaking out, they all went up a few cents (as did the market) and they all declined with the market. They were all identical in just about everyway, timing, indications, intraday divergences etc. of course the only difference was volatility, but same up and down pattern and losings. If any of you know of any books that cover this subject, considering it is the only subject worth learning really.. I would appreciate it. Thanks. To all the ‘pros’ out there writing books and doing seminars, YOUR IDIOTS! Don’t leave out the most important parts!! haha.. I only lost 180 bucks so not that big a deal, but still not cool.
Meant to say to all the ‘pros’ out there writing books and doing webinars* .. not seminars.
Meant to say to all the ‘pros’ out there writing books and doing webinars* .. not seminars.

Justin answers:

Market trading on MACROeconomic info + high volatility = technical trading stinks!
Consider yourself “warned”.

Steven asks…

Are the gurus of the stock market Bi-Polar?

Man, the market panics and the Dow drops nearly 2,400 points in little over a week. Today, with nothing but a mere pat on the head of reassurance, the Dow posts a 936 point gain.

What‘s your bet? If Henry Paulson farts, will the Dow go up or down?
Folks. My point was the market is extremely volatile and subject to panic selling. I was trying to make a joke of Paulson’s role.
Thanks everyone for answering.
Thanks everyone for answering.

Justin answers:

The market has dropped nearly 7,000 pts in 10 months.

From 14K to 7.7K at its lowest point and its rebounded up to 8500-ish today (last time I looked).

Its highly volatile…not a good thing. People are looking for a reason to think the “bottom” has been found, and others are looking at a reason to sell, as in an artificial bump to recoop some losses before getting out.

By many accounts, its going to be like this for a year or more.

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