Silver Takes a Tumble

It is Economics 101: buy low and sell high. If you followed this simple rule when it came to silver, you are probably sitting pretty right about now.

Or are you?

In recent months, silver has been the commodity to watch. It climbed higher and higher, peaking at around $49 an ounce, but over the past week and a half, the silver rollercoaster has hit its freefall.

Varney & Co. has followed silver diligently since it began its ascent, and so has investment advisor Gil Morales. Morales got in early, buying silver on its upside, and when he joined Varney today, he reported: “We sold it right.”

Silver began to fall when the CME raised the margin requirements, making it more expensive to play the market, but that wasn’t what led Morales to sell when he did.

“We did not know the CME was going to raise the margin requirements. The technical aspects of silver were giving a sell symbol just before all of that happened,” said Morales.

Morales says the key to investment success is to buy into fear and sell into greed. Investors must realize that “markets are always about greed and fear and when you have extremes on either end, there is always opportunity.”

By selling into greed, Morales and his associates find themselves up 49% gross for the year in cash. Despite these substantial gains, Morales recommends that investors do not hastily jump into silver if it does begin to rebound.

“I don’t see anything else setting up right now. We are fat and happy,” said Morales, “We are just going to lay back and wait for the next window of opportunity to open up.

When asked if he would buy silver again in the near future, Morales’s answer was simple:

“Unless I am trying to catch a falling knife, no, I am not going to buy it.”