gold investment, silver investment

Precious metals investment terms A to Z

S&P / TSX Composite Index

The S&P/TSX Composite Index is a stock index of about 250 largest companies on the Toronto Stock Exchange (TSX). The index was introduced in 1977 and is calculated by Standard and Poor’s. The S&P/TSX is the headline index and the primary gauge of the Canadian stock market. We may say that it is the Canadian equivalent of the U.S. S&P 500 Index.

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S&P 500

As the jokes goes, the S&P 500 crashes are worse than a divorce. An investor can lose half of his money and the wife would be still there.

The Standard & Poor’s 500 Index (S&P 500, or just S&P) is an index of 500 largest U.S. corporations by market capitalization listed on the New York Stock Exchange or Nasdaq Composite. The index was introduced in the 1923, but the S&P 500 in its present form began on March 4, 1957. Contrary to the Dow Jones Industrial Average, the S&P 500 is a market value weighted index which includes 500 companies across all industries and both growth stocks and value stocks. For these reasons, the S&P 500 is one of the most commonly followed equity indices, and it is believed to be one of the best representations of the U.S. stock market.

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Safe Haven

A safe-haven asset is an asset that is uncorrelated (weak safe-haven) or negatively correlated (strong safe haven) with another asset or portfolio in times of market stress or turmoil. So, a safe-haven asset protects investors during crises, but not necessarily during normal times. Hence, a safe-haven asset is expected to retain its value or even increase in value during times of market turbulence when most asset prices decline.

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Sahm Rule

One of the most important economic and investing puzzles is how to spot a recessions. There are myriads of indicators – and people are constantly creating new ones! The recent example of a new recessionary measures is the Sahm Rule Recession Indicator, developed by Claudia Sahm, the Fed economist.

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Seasonality

Tendency for a given market to outperform or underperform during a given time in a year that can be profitably traded.

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SEC (U.S. Securities and Exchange Commission)

The U.S. Securities and Exchange Commission (SEC), based in Washington, D.C., is an independent U.S. federal agency created in 1934 that regulates securities markets (like gold stocks). The stated mission of the SEC is to “protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.”

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Self-similarity

A situation, in which a part of an object (for instance a chart) is similar to other parts of it or (and) to this object as a whole. If an object is self-similar than we may infer that it is a fractal. One of the examples are chart patterns - what a given market (for instance: gold) does in a week may be very similar to what it did over a year, and something that it did over a decade, might be just like what we saw in several hours. Technical formations appear on many different ways and they can be viewed as something that's self-similar. The same formation is likely to be seen in more than one time-frame. More information on the subject of self-similar objects and the possibility to use self-similarity and fractals in the precious metals market analysis is to be found under the term fractal

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Senior Mining Stocks

Senior Mining Stocks (a.k.a. Seniors) are stocks of a considerably large commodity (e.g. gold) producing mining companies with an established position and relatively large market capitalization. Senior stocks are usually perceived as being less risky than junior stocks (stocks of my smaller mining companies) – they are more liquid and their prices are typically subject to less volatility.

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Shooting Star

A shooting star is a pattern in the price of an asset. It is usually found in an uptrend and suggests a bearish outlook and a potential reversal. In other words, it’s one of the reversal patterns. The pattern is on one specific period of trading, usually one day, week or month, depending on the time horizon you consider. The main tenet of this pattern is that the price moves up fueled by buying but then reverses and erases most of the move up or even the entire move up. It hints at the possibility that the buying power is drying up and that more selling is to occur.

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Short Selling (going short)

Short Selling (also known as “going short” or simply “shorting”) is a way of profiting on lower prices. It’s the practice of selling borrowed (from the broker) assets, with the aim to buy them back later and return to the lender. Short sellers assume that they will be able to buy the stock back at a lower price than they sold short and thus profit.

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Short-term Trades

Short-term trades are trades that terminate within a short period from their inception. They can be very profitable, but they are also very risky.

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Silver as an Element

Chemically, silver is an element with the symbol Ag and atomic number 47. It belongs to noble metals. Silver is in gold’s shadow, although it is also a unique metal. It is much more abundant than gold, but silver is still one of the least naturally occurring metals. In the Earth’s crust, silver occurs 800 times less frequently than copper. In pure form it has a brilliant white metallic luster.

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Silver as an Investment

Silver served as money for thousands of year until the gold standard was introduced in the XIX century. Although not money, silver is used as an investment. Like gold, silver is a monetary asset, which may be used as a hedge or safe-haven against tail risks. However, silver is much more widely used in the industry; therefore it behaves more like commodity and is more business cycle-sensitive than gold.

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Silver Demand

The price of silver, as each price, is determined by the market forces of demand and supply. The demand is the amount of a good demanded for purchase at each price. Therefore, the demand for silver is the amount of silver demanded for purchase at each price. The silver demand is often analyzed on an annual basis and divided into jewelry demand and silverware, industrial demand, and coins and bars.

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Silver Manipulation

Market manipulation, also called price manipulation, can be defined broadly as a purposeful effort to control prices. This sort of manipulation exists in financial markets as traders try to influence the markets. It may be responsible for some short-term aberrations in asset prices, including the price of silver. However, there is another, more specific definition. According to the U.S. Securities and Exchange Commission, manipulation is intentional conduct designed to deceive investors by controlling or artificially affecting the market for a security… This includes rigging quotes, prices or trades to create a false or deceptive picture of the demand for an asset. A popular belief within the precious metals investing community is that gold is manipulated and the same goes for silver (generally downwards, in what is described as price suppression).

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