Investing in Gold & Silver For Dummies

Paul Mladjenovic is a renowned certified financial planner and investing consultant. He has authored six editions of the bestselling Stock Investing For Dummies and is frequently interviewed by media outlets including MarketWatch, Kitco, OANN, and more.

• Introduction 1About This Book 1Foolish Assumptions 2Icons Used in This Book 2Beyond the Book 3Where to Go from Here 3Part 1: Getting Started with Gold and Silver 5Chapter 1: Exploring the World of Gold and Silver 7Considering Gold and Silver for Your Situation 8Assessing the world’s financial issues 9Knowing how gold and silver can help you 9Taking Action Before You Invest in Gold and Silver 10Reviewing your portfolio 10Boosting your cash position 11Using your talents in your spare time 11Doing your research on gold and silver 11Chapter 2: Understanding Gold and Silver’s Greatest Benefit 13Looking at Counterparty Risk in Today’s Investments 14Stocks 15Bonds 15ETFs and mutual funds 16Cash and bank investments 17Real estate 18Futures and options 18Bitcoin and other cryptocurrencies 18Knowing That Gold and Silver Have Risks, Too 19Chapter 3: Adding Gold and Silver to Your Portfolio Mix 21Defining Saving, Investing, Trading, and Speculating 22Saving 22Investing 22Trading 23Speculating 23Building Your Financial Profile 24For the conservative investor 24For the growth investor 24For the speculator 25For the trader 25Making Other Portfolio Considerations 26Deciding on a percentage to put in metals 26Choosing gold, silver, or both 27Investing for income 27Chapter 4: Recognizing the Risks 29Exploring Different Kinds of Risks 31Physical risks 31Market risks 31Futures exchange risks 32Political risks 33The risk of fraud  34Minimizing Your Risk 35Gaining knowledge 35Being disciplined 36Having patience 36Using diversification 37Keeping some risk management tools in your arsenal 38Weighing Risk against Return with the 10 Percent Rule 39Part 2: Spanning the Gold and Silver Landscape 41Chapter 5: Investing in Gold 43Comparing Gold to Other Investment Assets 44Gold versus the financial world in general 45Gold versus stocks versus currencies 46Understanding the Gold Market 47Gold demand 47Gold supply 49Going Over Gold’s Recent Bull and Bear Markets 49The 1970s bull market 50The 1980s bear market 50The 1990s range-bound market 50The bull and bear markets of 2000–2008 51The bull market and bear market of 2008–2018 51Making the Case for Gold Today 52Chapter 6: Surveying Silver 55Comparing Silver and Gold 56Silver’s similarities to gold 56Silver’s unique qualities 56Digging into the Silver Market 57Silver demand 58Silver supply 59Future drivers of silver 61Starting with Silver’s Modern History in the 1970s 61Picking Apart Silver’s Performance during 2000–2020 62The first silver bull market (2000–2008) 63The bull market of 2009–2011 and the bear market of 2011–2018 63Silver versus the financial world in 2020 and beyond 64Resources for Informed Silver Investors 66Chapter 7: Making the Most of Mining Stocks 69Examining the Essentials of Stock Investing 70A profitable company 71A growing industry 72A healthy balance sheet 73Knowing What to Look for When You Evaluate Mining Stocks 74Value that isn’t cheaper than dirt 74Management that you can dig 75Politics: Not in my backyard 75Distinguishing Different Types of Mining Stocks 76The majors 77Midtier mining companies 77Junior miners, eureka! Exploratory companies 78Considering the Risks of Mining Stocks 78Boosting Your Returns 79Generating income 79Leveraging with warrants 80Checking out mining stock indexes 82Spotlighting the Pros 83Rick Rule 83Doug Casey 84Chapter 8: Examining Mutual Funds and ETFs 85Choosing Mutual Funds 86The advantages of mutual funds 86The downside of mutual funds 89Keys to success with mutual funds 92The prospectus: Netting it out 93Mutual fund resources 94Selecting Exchange-Traded Funds 94The pros and cons of ETFs 95The world of precious metals ETFs 96Other ETFs for the metals-minded 97ETF resources 98Part 3: Looking at Other Gold and Silver Investing Vehicles 101Chapter 9: Going Direct: Buying Bullion 103Weighty Matters: Troy Ounces 103Making the Case for Physical Ownership 104What could go wrong with paper assets? 105Bullion versus numismatics 106The risks of owning physical metals 107Going for Gold Physical Bullion 108American Eagle Gold Bullion Coins 108The American Buffalo Gold Bullion Coin 109The Krugerrand 110The Canadian Maple Leaf 110Other gold bullion 111Seeking Out Silver Physical Bullion 112American Eagle Silver Bullion Coins 112One-ounce rounds 113Junk silver bags 113The $1,000 bag of silver dollars 114The 40 percent silver bag 114Silver bars and ingots 115So what kind of silver is best? 116Gold and Silver Commemorative Coins 116Bullion Costs, Fees, Dealers, and Resources 117Chapter 10: Numismatic Coins and Collectibles 119Understanding the Basics of Numismatic Coins 120Aiming for profitable coin investing 120Making the grade 121Checking out information sources 122Considering Collectible Coins 123Gold coins 123Silver coins 124Other coins 125A special category: Commemoratives 126Exploring Coin Organizations and Services 126Information sharing 126Grading services 127Selling Your Coins 128Potential buyers 128Pricing information 130Chapter 11: Leveraged and Inverse ETFs 133Feeling Bullish: Leveraged ETFs 133Discovering what makes an ETF leveraged 134Some advantages of leveraged ETFs versus futures and options 136Checking out a real-life example of a gold and silver leveraged ETF 136Feeling Bearish: Inverse ETFs and Inverse Leveraged ETFs 139Using Leveraged and Inverse ETFs during the Market’s Ups and Downs 140Bullish moves 141Bearish moves 141Other considerations 142Looking at Resources for Leveraged and Inverse ETFs 142Chapter 12: Focusing on Futures 145Back to the Futures 145How the futures market works 147What can be traded as a futures contract 148The Players in the World of Futures 149The U.S exchanges 149The international futures exchanges 150Speculators 150Hedgers 150Regulators 151The Fundamentals of Futures Contracts 152A specified size 153Specified quality 153Specified prices 153A specified delivery date 154Metals Futures Contracts 154Precious metals contracts 155Mini-futures contracts 156Pass the margin 156Leverage: The double-edged sword 158Basic Futures Trading Strategies 158Basic strategy #1: Going long 159Basic strategy #2: Going short 159Basic strategy #3: Spreads 160Using Fundamental and Technical Analysis with Futures 162Futures versus Options on Futures 165Futures Resources 166Chapter 13: Considering Options 167Discovering How Options Work 168The call option 168The put option 172Placing Orders for Options 174Options: Offering Something for Everyone 174For those seeking gains 175Income strategy #1: Writing covered calls 175Income strategy #2: Writing puts 176Minimizing Risks with Options 177Trying Some Profitable Combinations 178The zero-cost collar 178The straddle 179Checking Out Options in the World of Precious Metals 180Options on mining stocks 180An option with no expiration? 181Options on ETFs and indexes 182Options on futures 182Following Golden Rules for Options Success 183Consulting Options Resources 185Part 4: Digging into Gold and Silver Investing Strategies 187Chapter 14: Trying Out Trading Approaches 189Like a Scout: Being Prepared 190Be a voracious reader 190Have your plan 190Decide your market 191Practice with simulated trading 192Picking Out Your Vehicle 192Selecting Your Trading Strategy 193Choosing your market outlook 194Stock trading coupled with options 194Futures trading coupled with options 195Trading the Gold-to-Silver Ratio (GSR) 196Getting a little background on the GSR 197Investing with the GSR 198Trading with the GSR 198Chapter 15: Using Technical Analysis 201Defining Technical Analysis 202Comparing Technical Analysis versus Fundamental Analysis 202The guts of technical analysis 203How about both? 204The tools of the trade 205Tracking the Trend 205Trend lengths 207Channels 207Resistance and support 208Checking Out Charts 209Line charts 209Bar charts 210Candlestick charts 210Point and figure charts 210Picking Apart Chart Patterns 210Head and shoulders 211Reverse head and shoulders 211Cup and handle 211Double tops and bottoms 212Triangles 212Flags and pennants 212Wedges 213Gaps 213Assessing Moving Averages 213Simple moving averages (SMA) 213Other averages 215Investigating Indicators 215Oscillators 215The relative strength index (RSI) 215Moving average convergence/divergence (MACD) 216Crossovers and divergence 216Bollinger bands 217Focusing on the Short Term versus the Long Term 217Resources for Technical Analysis 218Chapter 16: Using Dealers and Brokers 219Starting with Some General Points on Dealers and Brokers 220Working with Gold and Silver Dealers 221Sticking to major bullion coins 221Investigating a dealer’s reputation and reviews 222Getting at least three price quotes 222Understanding ancillary charges 222Deciding whether to get physical metals online or visit a local dealer 222Picking apart a buy back policy 223Getting the Scoop on Stock Brokerage Accounts 223Beginning with types of stockbrokers 224Assessing account types 224Opening a stock brokerage account 225Distinguishing Types of Orders 226Stock brokerage services 226Margin in a stock brokerage account 228Introducing Types of Futures Brokers 230Selecting a Futures Broker 231Dealing with Futures Accounts 233Seeing how margin works in a futures account 233Watching out for problems in your futures account 234Opening a futures account 235Checking out futures account commissions and fees 236Making futures orders 237Considering managed futures accounts 240Chapter 17: Tax and Retirement Considerations 243Assessing Taxable Activity in Different Accounts 244Regular investment accounts 244Individual retirement accounts 246Understanding Capital Gains and Losses 246Looking at Tax-Deductible Activity 247Surveying Special Tax Considerations 248Gold and silver as collectibles 248Tax rules for traders 249Tax Resources to Keep You Up-to-Date 250The IRS (of course!) 250Helpful tax websites 251An ounce of prevention 251Adding Physical Precious Metals to an IRA 252Precious metals allowed for IRAs 252Companies where you can establish an account 253Part 5: The Part of Tens 255Chapter 18: Ten Reasons to Have Gold and Silver 257Gold and Silver Provide Diversification 258Gold and Silver Allow for Privacy 258Gold and Silver Are Portable Wealth 259Gold and Silver Ease Retirement Concerns 259Gold Is a Safe Haven Asset 260The Value of Gold and Silver Is Never Zero 260Gold Retains Its Value in Bear Markets 261Gold and Silver Have Enduring Demand 261Gold and Silver Make Good Inflation Hedges 262Gold Guards against Financial Bubbles 263Chapter 19: Ten Ways to Add Gold and Silver to Your Portfolio 265Major Gold and Silver Stocks 266Junior Gold and Silver Stocks 266Mutual Funds 266Physical Metal ETFs 267Bullion Coins 267Numismatic Coins 268Leveraged ETFs 268Junk Silver 268Gold and Silver Cryptocurrencies 269Buying through Goldmoney and OWNx 270Chapter 20: Ten (Or So) Tips for Gold and Silver Speculators and Traders 271Focus on a Specialty 272Do Research and More Research 272Be a Contrarian 273Limit Your Grubstake 273Stagger Your Entry 273Use the Right Speculative Vehicles 274Have Multiple Positions 275Use Technical Indicators 275Do Some Hedging 275Take a Profit 276Use Brokerage Orders 276Part 6: Appendixes 277Appendix A: Resources For Gold and Silver Investors 279Appendix B: Gold and Silver Investments 293Index 299