OK, let's start by saying this is going to be complicated.
With silver prices soaring to an eight-year high of US$30.35 per ounce this week in an exciting short squeeze, it begs the question: Should I be getting in on the action?
The answer is yes, and no.
Kelowna-based market watcher and president of Goldcliff Resource Corp. George Sanders is of those two minds.
"Silver isn't just in jewelry, coins and bars, but as a highly conductive and non-corrosive precious metal it's also in so many electronics from smartphones and tablets to laptops and circuit boards and it's also an important part of all solar panels," explains Sanders.
"So it has strong fundamentals and as such could go up in the future so an average investor could buy a silver ETF (exchange-traded fund) or stock in a silver producer such as (Vancouver-based) First Majestic, Coeur Mining, Wheaton Precious Metals, Hecla and PanAmerican Silver."
Yet, Sanders also urges: "Do yourself a favour and don't go looking for short sales (short squeeze)."
Since silver is an attempted short squeeze that quickly fizzled, it might be wise to leave silver alone right now.
The silver exhilaration started last week when an anti-establishment sub-Reddit
The price of silver popped 21% from US$25 per ounce on Jan. 27 to US$30.35 on Feb. 1, just five days.
Over the weekend, there was also a run on silver coins with dealers running out,
Since, the price has softened to $28.89 in mid-day trading on Tuesday.
But still, it's significantly more than the US$11.79 silver was valued at in March 2020.
A short squeeze is a convoluted process of essentially borrowing a stock you think is overvalued at a reduced price and hoping it goes down in order to make money.
"I don't think the average investor should bother trying to understand short sales," says Sanders.
"People should only invest what they can afford in blue-chip stocks like Canadian banks, an equity metal fund or exchange-traded fund."
A local silver stock option could be Copper Mountain Mining in Princeton.
Although, as its name indicates, the company is mining copper, byproducts are gold and silver.
In fact, in the nine months ended September 2020, Copper Mountain mined 54 million pounds of copper, 247,560 ounces of silver and 20,208 ounces of gold.
Company stock on Tuesday was trading at $2.20 and over the past year has been as high as $2.64 and as low as 28 cents.
