Last Updated on July 18, 2018 Posted by Colonial Acres Coins
When it comes to the trading of any kind, the “buy low, sell high” mantra is something everyone knows by default. Aside from investing in just precious metals, this is a form of timeless truth that can be equally applied throughout countless other industries. As brilliant a piece of advice as it is, another universal truth also applies in this case, “easier said than done.” The point is that buying low and selling high is no simple matter whether you’re trading Canadian silver dollars or gold bars. Knowing when the time is right can be made easier by paying attention to a few factors:
- Observe the gold to crude oil ratio
- Observe the gold to silver ratio
- Assess the situation from a personal budget-perspective
- Don’t hesitate
- Remove emotions from the equation
Observe the Gold to Crude Oil Ratio
There is bound to be some math involved when it comes to investing, so it might as well be addressed at the very start. The general rule is that it’s okay to sell gold when this ratio rises to around 30 to 1. For instance, if you have a situation in which crude oil is priced at $300 per barrel and gold is priced at $9,000, they are at a 30 to 1 ratio.
Observe the Gold to Silver Ratio
Historically speaking, the ratio between the prices of gold and silver has held still at around 16 to 1. To put that differently, if gold was priced at $16 an ounce, that meant that the price of silver would be $1 an ounce. That ratio is about 55 to 1 at the moment. The thing is – all of the big investors who trade gold and silver bullion actually scrutinize the gold-to-silver ratio as a signal for the right time to buy or sell.
Assess the Situation From a Personal Budget Perspective
Instead of looking at the situation from an investment perspective, try focusing on it from a personal budget point of view. It may be time to sell if you need quick cash and can part ways with your gold – even if the market conditions aren’t optimal. On the other hand, it is important to consider the long-term effects of a quick sale of gold or silver coins on your finances. In other words – will such a move result in making gains after the actual sale? Or would it be a short-term solution for your current financial situation?
Never Hesitate
Since they seem to think conditions might improve even further, many investors will actually hesitate unnecessarily way too often. Instead, focus on simplifying things: sell if the conditions are good for selling. The logic behind such an approach is that you shouldn’t wait to make a bigger profit tomorrow if you can already make a good profit right now. The alternative is ending up with nothing.
Remove Emotions From the Equation
There’s no room for emotions when it comes to matters of finance. Force yourself to observe the situation from a purely monetary standpoint. As a result, you’ll be able to reach conclusions and gain new insights that you wouldn’t have been able to see otherwise. The most important thing to remember is to not sell gold out of fear or desperation. Instead, the best course of action is to educate yourself so that you can make more informed decisions as a result.
Looking to Buy & Sell Gold and Silver Bullion? Check Out Colonial Acres
In addition to being the ideal resource for all things related to numismatics, Colonial Acres Coins also serves as a premier gold and silver bullion dealer. If you need your bullion accurately appraised or are looking to invest in gold and silver coins but don’t know where to start and how to avoid “shark” traps, going to a reputable and trusted dealer is always the right answer. Colonial Acres has been in business for more than two decades and has a stellar reputation in the industry. Be it Canadian silver dollars or one of the RCM’s purest gold coins, you’ll be able to find what you’re looking for here. Head down to Colonial Acres and ensure your collection fetches top dollar.