Your definitions of risk-tolerance and risk-aversion are not in tune with the general definitions. In fact, your definitions seem to be contrary to those I’ve encountered in other sources. Could you explain that?
As a reminder – the classic definition assumes that being invested in the market means risk and being in cash is not risky.
Actually, we intentionally reversed the classic definition. In our opinion the risk with long-term precious metals investments is to be out of the market. What you see in Investopedia and other similar sources is a general definition, which assumes that cash is the no-risk asset, however in the current market environment; we believe that this should refer to the precious metals. Which of the two proved to be better store of value and therefore less risky throughout centuries: gold and silver or paper money? The obvious answer is precious metals.
Long-term Investors generally want to keep their holdings invested in a given asset class until the final top is reached (hundreds or much more likely thousands of dollars away). However, given the fact that gold and silver may plunge fast (the big 2008 downswing), these Investors would also prefer to stay out of the market with at least a part of their holdings during the most unfavorable conditions. Consequently, they want to stay out of the market only when the risk of a sell-off is very big, and ride out the smaller / less probable declines. For long-term Investors, the risk is to be out of the market, because the consequences of being totally out of the market are too significant - missing a $200 move to save $10 on an entry point simply isn't worth it.
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