The Mid Cap Silver Stocks Canada Loves

When it comes to silver stocks Canada has always been a major player just as it has in many other extractive industries. The times always change, however, as do environmental standards. In the current market, most of the larger cap Canadian silver stocks have gone south in search of higher quality reserves that are recoverable at lower prices.

While Central and South American Countries Supply The Mines For These Silver Stocks Canada Provides Management and Expertise

One of the Toronto-listed mining stocks that still holds at least a foothold in Canada proper is Silver Standard, TCX:SSO. Silver Standard has diversified its operations all the way from the Great Slave Lake nearly to Tierra del Fuego. SSO’s primary operation is at the Pirquitas mine in northern Argentina. With production just recently underway, Pirquitas expects to produce 8-10 million ounces of silver and 10-12 million pounds of zinc on an annualized basis. The cash flow from this mine has been plowed back into exploratory and development ventures in Ecuador, Mexico, the United States and even up at their Sunrise Lake facility in northern Canada.

Among the many expatriate silver stocks Canada incorporates is Vancouver-based Endeavour Silver, TCX:EDR. Endeavour extracts approximately 3.3 million ounces of silver and 17,000 ounces of gold from its Guanacevi and Guanajuato Mines in Mexico. Endeavour sports a particularly attractive recovery cost of just $5.71 an ounce and expects efficiency improvements to drive that cost down to an even $5.50 an ounce. No matter how low the market price of silver falls, Endeavor is likely to remain in operation at any price due to this low margin. Future growth prospects are very bright down in the sunny south. Both of these companies are silver stocks Canada can and should be proud of.

Find more information on silver stocks Canada on the FREE email list:

Options For Silver Investment In India

Silver investment in India is not as easy as it is in many developed countries.  As of late 2011, there are no Exchange Traded Funds (ETFs) or mutual funds available in India that invest in silver.  However there are plenty of other options available for silver investment in India for residents of India.

While silver ETFs are not currently available for silver investment in India, Indian investors who have brokerage accounts with access to United States issued ETFs and mutual funds can buy and sell United States based silver ETFs and mutual funds.  There are currency risks associated with buying and selling silver ETFs and mutual funds denominated in United States Dollars since any devaluation of the Indian rupee versus the United States Dollar will diminish any silver investment gains; therefore, investing in silver via this route is not the most ideal way for silver investment in India.

During 2011, India’s National Spot Exchange Limited (NSEL), which is an Indian commodities exchange, started offering a product called E-Silver.  Each unit of E-Silver represents 100 grams of silver, and is brought and sold at real-time prices on the NSEL that track world silver prices.  E-Silver is a relatively easy silver investment in India.  E-Silver can either be held in an electronic account or physically delivered to the buyer.

Silver investment in India also includes more traditional methods of silver investment, such as buying silver bullion bars and placing them in safe storage or buying products or jewelry made out of silver.  However, for many Indians storing silver bullion bars or jewelry safely and economically is not a feasible.

While not a direct silver investment, silver investment in India can also be done through the Indian futures market.  Silver futures can be bought and sold in India, which generally track the price changes in the world futures markets.  See Buying and Selling Futures for more information about futures trading.

How Increased Silver Investment In India May Affect Silver Prices

Supply and demand fundamentals for silver are bullish going into 2012.  Supply of silver is limited due to silver mining constraints.  Demand for silver from industrial processes, commercial outfits that make jewelry and silver products, and silver investors has been increasing in recent years, and is likely to continue to increase during 2012.

With over 1.2 Billion people, India is the second most populated country in the world.  While many people in India live in poverty, the growing Indian middle and upper classes are demanding products made from silver and are increasingly turning to silver as an investment vehicle.  With tight silver supplies and increasing silver use and investment in India, India consumers and investors could have a bullish impact on silver prices going forward.

Stay up to date on Silver Investment In India by getting on our FREE eMail list!

Demand For Hard Assets Is Positive For Silver Price Projections

Making price projections for commodities is very difficult due to all the variables that affect commodity prices; however, a credible case can be made for bullish silver price projections over the next few years.  Many in the investment community do not realize that silver has actually done better than gold over the past two years, with a gain of 76% for an ounce of silver and only 49% for an ounce of gold since December 2009.

While silver peaked out at $48.58 in April 2011 and now trades in the vicinity of $32.00 per ounce, there is no reason to abandon bullish silver price projections for the foreseeable future.  The reasons for the silver rally to nearly $50 per ounce in April 2011 are still present.  Silver is a hard asset that is desirable during times of economic upheaval and currency debasement.  With the European Debt Crisis increasing the chances that the European Central Bank will be forced to start printing Euros, and the possibility that the United States Federal Reserve Bank may engage in additional quantitative easing if the economy slows down in 2012, hard assets such as silver will remain in demand and should increase in price in coming years, as fiat currencies are devalued.

The Bullish Case for Silver Price Projections

Besides the likelihood that central banks in Europe and the United States will increase the supply of Euros and Dollars in 2012 to bolster their economies and ease their debt burdens, there are other reasons to be bullish regarding silver price projections for 2012 and beyond.

Supply and demand fundamentals for silver indicate bullish silver price projections.  Only one Billion ounces of silver bullion is available for consumption by industries that use silver in industrial processes, commercial outfits that make jewelry and silver products, and silver investors.  Unlike gold, silver is an industrial metal which has an industrial base of demand beyond jewelry and investment.  The current supply of silver is barely adequate to keep up with demand for silver.  Any uptick in demand for silver, will lead to an increase in the price of silver.

Declining base metal production is a bullish indicator for silver price projections.  Much of the silver that is currently mined out of the earth is a byproduct of base metals mining.  If the rate of base metal mining decreases in coming years, due to less demand from stagnating industrialized economies for base metals, the supply of silver will decrease, which will lead to an increase in the price of silver.

The advantage that silver has over gold is that since silver is an industrial metal, demand for silver increases as the world economy strengthens, so if 2012 and beyond are surprisingly strong economic years, then the case for bullish silver price projections remains intact.  On the flip side of the coin, if 2012 and beyond are weak economic years, central banks are likely to flood their economies with money, which also keeps the bullish silver price projections intact.

Stay up to date on Silver Price Projections by getting on our FREE eMail list!

Cotton Commodity: The Fibers of a Good Investment

While many investors have been focusing their efforts on commodities such as corn and oil, others are discovering that investing in cotton commodity can result in large returns. There are a number of reasons why cotton is seeing such a huge increase in popularity. Over the last few decades, many clothing manufacturers have turned away from natural fibers. Inexpensive clothing has been manufactured using synthetic materials such as polyester and rayon. Natural fibers, such as silk and cashmere, were considered to be luxury materials that were afforded only by the wealthy. In recent years, however, the organic movement has encouraged the use of natural fibers nearly as often as it has pushed the consumption of organic fruits and vegetables. Cotton, one of the most abundant and affordable natural fibers, has seen a sharp increase in popularity. Cotton commodity prices have accordingly.

Smart Investments in Cotton Commodity

If you are considering investing in cotton commodity, there are a few things you can do to make sure that your investment pays off. First, be aware that, like many commodities, cotton is a natural, crop-grown product. Its production can be drastically encouraged or hindered by uncontrollable forces such as the weather. If you want to invest in cotton successfully, you should immerse yourself in the world of cotton production. Read farmers’ reports and study weather patterns so you know how crops are expected to fare.

Keeping up with the latest fashion trends can also help you predict the movement of the cotton market. Clothing manufacture is the most common use for cotton fibers. When the runways of New York and Paris are filled with billowing layers of natural cotton, you can be sure that cotton commodity will soon be in demand and that cotton prices are sure to rise.

Why You Want The Best Commodity Funds

Diversify your portfolio with the best commodity funds in addition to stocks and bonds. The unique properties of commodities mutual funds make them great hedges against inflation. While the mixture of stocks and bonds in your portfolio balances risk and profit with safety and stability, your commodity funds can guard against losses due to inflated currency. This is due to the tendency to keep up with inflation that commodity prices have.

Qualities Of The Best Commodity Funds

Commodities are things which come from the earth and which people or societies consume in some fashion. This includes the foods that people eat and the raw elements, which they extract from the Earth in order to use them in industry, such as metal or oil. They are generally viewed as necessities rather than luxuries.

Since commodities come with their own risks, just as stocks do, commodity mutual funds were developed in order to ensure the benefits of these investments while limiting the potential losses. The best commodity funds include a broad spectrum of goods so that a downturn in one section of the market does not have an overwhelming effect on the entire fund. As an example, a single fund might include investments in precious metals, agricultural products and energy futures.

The best commodity funds will react to the economic health of the entire market in a way that is beneficial to their investors. While many people complain about the rising cost of living, those who are invested in these funds will actually profit from that situation because the prices of their investments will rise as well. This is not the case with all investments. Stocks can lose money for a variety of reasons, but the best commodity funds are not subject to the same dangers.

Win Big with a Commodity Trading Strategy

If you talk to most successful investors, they will tell you that they have a commodity trading strategy. While developing a strategy may seem time-consuming and difficult, it is one of the most important steps to making informed investment decisions. In fact, most people who lose money on the commodity market have failed because they did not have a clear idea of what they were doing. A solid strategy can turn the commodity market from a risky gamble into a game of skill. When you have done your research in advance and made your trading decisions based on sound knowledge and an overall game plan, you are more likely to make the right decisions and to recover quickly from your missteps. In short, a commodity trading strategy can mean the difference between large losses and even larger returns.

How to Develop a Commodity Trading Strategy

While it is important to base your commodity trading strategy on facts and information, it is equally important that it represent your personal investment style. Taking risks may be necessary to winning big, but you should only take risks that you feel comfortable taking. Doing your own research is the best way to understand the market and to find out which commodities are on the rise. Read online tip sheets, but do not rely on them exclusively. Read up on every producer and every company you are considering investing in. The more you know, the better your decisions will be.

Regardless of where your investment interests lie, it is always a good idea to diversify your commodity portfolio. Invest in a range of commodities that are produced in different parts of the world. This will help protect you against uncontrollable factors such as bad growing conditions, natural disasters and international politics. With a diverse commodity trading strategy, no single problem will derail your total portfolio.

Find more information on commodity trading strategy on the FREE email list:

What are Commodity Mutual Funds?

Commodity mutual funds are similar to index funds for stocks. They allow investors to diversify their holdings with simultaneous investment in a variety of commodities. This generally renders them immune to spectacular losses while still offering the benefits associated with investment in these goods. One of the primary benefits is the hedge against inflation that they provide. When you put your money into goods whose value rises in pace with inflation rates, you have little to fear from the rising cost of living.

Advantages of Commodity Mutual Funds

Commodity mutual funds can protect your investment through diversification in two ways. One method involves spreading investment money into very distinct types of commodities. This might mean holding metals, energy stocks and agricultural goods in the same fund. As an example, a mutual fund might hold simultaneous investments in gold, crude oil and cattle. The percentage of the fund made up by each investment will have an impact on the stability of the fund as a whole.

Commodity mutual funds can also focus on a particular commodity but protect investors through a more specific type of diversification. For instance, a particular fund might invest primarily in one type of commodity but include various types of investments in that commodity. As an example, an oil mutual fund might carry investments in oil exploration companies, in companies that design drilling equipment, in oil futures and in direct investments in oil. Spreading the investment through the various elements of one sector of commodities like this can protect the whole fund from catastrophic loss in one company or in the general price of the commodity.

These funds differ from one another just like mutual funds that focus on stocks. Your earnings can be affected by the fees that they charge and the decisions that the fund managers make. Before you invest in commodity mutual funds, you should investigate them just as you would any other investment opportunity.

Find more information on commodity mutual funds on the FREE email list:

The Liffe Commodities Exchange

In the 1980s an Englishman created Liffe Commodities, a special exchange devoted to futures. It became known as the London International Financial Futures and Options Exchange. The commodities offered on this exchange came to include contracts of various sorts as it grew over the years. The distinguishing mark of this exchange was the opportunity it provided to investors to trade options or futures with special short-term interest rates.

History of Liffe Commodities

Originally, traders on this exchange operated under the system known as open outcry. They shouted or signaled to each other in order to make transactions across a busy trading floor. However, the trading continued even after the exchange closed via an automated system. This caused an extension in the trading day. The transactions carried out after hours were purely electronic.

The exchange which traded in Liffe commodities was very successful. Plans were made to expand it into a new building around a decade ago. However, one of the most prominent investment products on the exchange at that time went under. This forced the operators of the exchange to abandon plans for immediate growth.

The automated trading system that investors used to trade Liffe commodities was so admired for its efficiency that the exchange was able to sell this technology to other exchanges.  Eventually, the exchange was bought by a European company. The name changed but Liffe commodities are still around and highly sought by traders around the world.

This exchange, under any name, is increasingly relevant as futures and options become much more significant parts of portfolios in every country. As with any other investment, traders can win or lose when they trade on this exchange. The value of Liffe Commodities is still very high when compared to those traded on other exchanges.

Futures Or Stocks When It Comes To ETFs Natural Gas?

Maybe you’ve heard that over the past few years ETFs natural gas prices have done a whole lot of nothing compared to oil prices, but that situation begs the question: What’s the deal with ETFs offering exposure to natural gas? As is the case with most commodities, the exchange-traded products universe offers investors ways of accessing natural gas futures or ETFs that hold the stocks of natural gas exploration and production companies.

And despite tumbling natural gas prices, the outlook for ETFs natural gas is actually a win-win proposition. First, ETFs that are levered to natural gas are worth considering because emerging markets such as China and India are massive polluters and those countries are eagerly looking for ways to reduce their pollution footprints by increasing use of cleaner burning fuels. Enter natural gas.

Second, ETFs natural gas are getting a lift from the North American shale boom. This is where producers use the sometimes controversial technique known as “fracking” to separate gas and oil from centuries-old rock formations. The U.S. has an abundance of shale gas and the shale boom is still in the early innings, meaning good things await ETFs natural gas.

ETFs Natual Gas: The Fund To Avoid

Unless you’re an active trade, steer clear of the U.S. Natural Gas Fund (NYSE: UNG), which is easily the most controversial and perhaps the worst of the lot when it comes to ETFs natural gas. UNG holds natural gas futures, but since the fund is heavily weighted to the front-month contract, it has to roll contracts every month.

That many not sound like much, but the expenses associated with rolling those contracts add up. In fact, those expenses mean an ETF natural gas like UNG can actually lose investors money while natural gas prices are rising. Talk about a bitter pill to swallow.

ETFs Natural Gas: Equity ETFs To Consider

One of the top ETFs natural gas investors should have a look at is the First Trust ISE-Revere Natural Gas Index Fund (NYSE: FCG). FCG is home to 30 stocks with a good mix of independent natural gas producers and major oil companies. FCG’s lineup includes companies such as Anadarko Petroleum (NYSE: APC), EOG Resources (NYSE: EOG), Range Resources (NYSE: RRC), Exxon Mobil (NYSE: XOM) and Royal Dutch Shell (NYSE: RDS-A).

If you’re looking for an ETF natural gas with even more stocks and more oil exposure, the SPDR S&P Oil & Gas Exploration & Production ETF (NYSE: XOP) is an excellent bet. XOP holds all of the stocks we just mentioned, plus dozens more with an expense ratio that is far superior to FCG’s. Be advised: XOP is one of the most volatile ETFs on the market, ETFs natural gas or otherwise. It makes for a great short-term trade, but XOP may not be suitable for long-term investors.

Find more information on ETFs natural gas on the FREE email list:

Not All Gold Exchange Traded Funds Created Equal

While ETFs have been part of the investment landscape for nearly two decades, the concept of a gold exchange traded fund didn’t come along until late 2004. That’s when the SPDR Gold Shares (NYSE: GLD) burst onto the scene. Seven years later, GLD isn’t only the largest gold exchange traded fund in the world by a wide margin, it’s the second-largest ETF in the world trailing only the SPDR S&P 500 (NYSE: SPY). In fact, GLD spent a few days in 2011 as the largest ETF in the world by assets.

The idea of a gold exchange traded fund has become so popular that GLD now has over $70.3 billion in assets under management and is also one of the most heavily traded ETFs in the world. While GLD certainly has first-to-market advantage when it comes to gold exchange traded funds, it’s far from being the only option in this universe. Investors looking for choices among gold exchange traded funds would do well to consider GLD and other, similar funds.

Gold Exchange Traded Funds: Beyond GLD

The concept of GLD is quite simple. The ETF is backed by physical holdings of gold and its price reflects one-tenth the daily spot price of gold bullion, give or take a few cents. In other words, if spot gold closes at $1,800 an ounce on Monday, GLD should close around $180 a share. There are other gold exchange traded funds that do the same thing and they’re worth investigating as well.

Take the iShares Gold Trust (NYSE: IAU) for example. IAU became the second gold exchange traded fund listed in the U.S. when it debuted in January 2005. While IAU is smaller than GLD (it has almost $9.5 billion in AUM), the former also features a lower expense at 0.25%. That’s lower than the 0.4% expense ratio GLD offers.

And if you’re looking for something a little bit different, ETF Securities, an ETF sponsor that we’ve highlighted here before, has something unique for you in your search for a gold exchange traded fund. The firm sponsors the ETFS Physical Swiss Gold Shares (NYSE: SGOL) and the ETFS Physical Asian Gold Shares (NYSE: AGOL). SGOL and AGOl do exactly the same thing as GLD and IAU, but the gold they hold is stored in Switzerland and Singapore, respectively.

Mix It Up With Your Gold Exchange Traded Fund

Keeping with the theme of looking for something unique when it comes to gold exchange traded funds, the ETFS Physical PM Basket Shares (NYSE: GLTR) is a fund to consider. GLTR doesn’t just offer exposure to gold, it also features smaller allocations to silver, platinum and palladium. And don’t make your search for a gold exchange traded fund all about physical gold. Consider ETFs like the Market Vectors Gold Miners ETF (NYSE: GDX) and the Market Vectors Junior Gold Miners ETF (NYSEL GDXJ) if you want some equity exposure in your gold exchange traded fund.