"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 16 hours Economists Polarized On Trump’s Tariff Plan
  • 1 day Why Are Investors Overlooking Gold Stocks?
  • 1 day The App That Democratized Trading Is Now Worth $5B
  • 2 days Super-Cycles: Why Gold Is Set For A Breakout
  • 2 days U.S. Sanctions Russia For Election Meddling And Cyberattacks
  • 2 days Snap Shares Tank Over ‘Slap Rihanna’ Campaign
  • 2 days How Low Can Bitcoin Go?
  • 2 days Amazon’s Japan HQ Raided In Anti-Monopoly Push
  • 2 days Is Barrick Gold Close To Finding A Bottom?
  • 2 days Morgan Stanley’s Top 10 Short-Term Stock Picks
  • 2 days China: The Land Of The Ultra-Rich
  • 3 days Alibaba Soars On Reports Of China Listing
  • 3 days What Killed Toys ‘R’ Us?
  • 3 days SEC And IRS Take An Aggressive Stance On Cryptocurrencies
  • 3 days Bears And Bulls Face Off In Gold Markets
  • 3 days Bitcoin Is Winning Over The Housing Market
  • 3 days Markets Slide Sideways As Trade War Fears Linger
  • 3 days Why Aren’t Millennials Investing?
  • 3 days Bitcoin And Banking: The Next Mobile Payment Revolution
  • 4 days SEC Cracks Down On Silicon Valley’s “Disruptive Tech”
Amazon’s Bid For A Monopoly On Everything

Amazon’s Bid For A Monopoly On Everything

Amazon started in e-commerce, but…

What Killed Toys ‘R’ Us?

What Killed Toys ‘R’ Us?

In another blow for America’s…

Markets Slide Sideways As Trade War Fears Linger

Markets Slide Sideways As Trade War Fears Linger

Despite technology stocks hitting new…

Buy Silver Now? II

Are you invested in or looking to buy into the silver market? Back in April we wrote an article illustrating the seasonal trends for the price of silver. At that time we determined that it may make sense to wait for a more favorable time of year to buy new positions. Based on silver performance in past years, would it have made sense to buy in July / August, or would it have made sense to wait for a better buying opportunity? Let's take a look at some purchases in the bull market at the start of each August to see what would happen to that investment by spring.

Silver Price Indexed August 2004 to May 2005 Chart

In 2004 we can see that if we had purchased silver in August we would have had a little bit of buying opportunities in the coming months but not much. Silver more or less trades sideways to slightly up that year but July / August was a reasonable time of year to add to positions. So how about the other years?

Silver Price Indexed August 2005 to May 2006 Chart

In 2005 we can see that July / August was a fantastic time to add to new positions. A strong uptrend followed the typically slow summer months.

Silver Price Indexed August 2006 to May 2007 Chart

In 2006 a slightly better buying opportunity presented itself in September / October which can typically be another weak time of year for the price of silver. However, July / August proved to be a reasonably good time to add to positions in 2006.

Silver Price Indexed August 2007 to May 2008 Chart

In 2007 the price of silver trended much higher from summer to spring with the exception of a slightly better buying opportunity around September. Again, buying in July / August turned out to be a lower risk buying opportunity.

Silver Price Indexed August 2008 to May 2009 Chart

Clearly buying silver in July / August of 2008 was not a good idea. It made a lot more sense to wait to purchase the metal at a considerably lower price in October.

Silver Price Indexed August 2009 to May 2010 Chart

Silver Price Indexed August 2010 to May 2011 Chart

Now buying new silver positions in July / August of 2009 & 2010 was a fantastic time to buy silver. In fact, waiting to buy new positions in October could have resulted in missing this impressive uptrend.

Silver Price Indexed August 2011 to May 2012 Chart

In the strong downtrend of 2011, following the strong advance in 2010, August 2011 proved not to be a great time for buying silver.

Silver Price Indexed August 2012 to May 2013 Chart

From a short term perspective it would have been a very bad idea to buy silver in October of 2012.

The following is the simplest way we can summarize our thoughts on the above charts. When it comes to seasonal trends for the price of silver in the current bull market the following applies:

1) Summer is a great time to add to position as it is often at or near the low for the year.
2) When taking new positions in summer one must realize that even lower prices often present themselves in fall.
3) After a strong year with a large increase in the price of silver it is possible that prices do not shoot higher and can actually fall further heading into spring.
4) It is important to consider the market from many perspectives prior to buying but seasonal trends are a very helpful tool to consider.
What is interesting from the above analysis is just how well an investor could have done from 2004 to 2012 just from buying at the start of August and selling at the end of April. This is a rather simplistic trading strategy that could have made an investor, excluding fees and taxes, approximately a 31% compounded rate of return.

Good luck!


At www.investmentscore.com we use our proprietary technical indicators and consider seasonal trends to give us an idea of when to scale in and scale out of new positions. If you would like to learn about our strategy and sign up for our free or paid newsletter please visit www.investmentscore.com.


Back to homepage

Leave a comment

Leave a comment

Sign Up For The Safehaven Newsletter