Keep or Sell?

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lynn2000
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Keep or Sell?

Post by lynn2000 » Mon Oct 30, 2017 7:34 pm

We bought SLVP last September, the total loss is 29.66% till today. This is the only fund that lost our money and also the first ETF we purchased. We are debating if we should sell it. One opinion is to sell it and put the money into other fund which has been growing. The other thought is either to leave it there or purchase more of it at much lower price than we paid to bring down the cost. When we looked at the prospectus, SLVP seemingly didn't perform well in the past few years. Not sure what to do, any advice will be appreciated!

Gill
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Re: Keep or Sell?

Post by Gill » Mon Oct 30, 2017 7:41 pm

Is this the silver mining company?
Gill

Dottie57
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Re: Keep or Sell?

Post by Dottie57 » Mon Oct 30, 2017 7:46 pm

I am not big on precious metals.

Don't chase returns, but figure out what it is that you want to own. I have U.S. Stock fund, an international stock fund and an intermediate bond fund. All hold index related assets and have a small expense fund. I have the stocks for portfolio growth and bonds for safety during bad economic times.

Metal looks good as jewelery, but is not great as investment.

krow36
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Re: Keep or Sell?

Post by krow36 » Mon Oct 30, 2017 7:48 pm

iShares MSCI Global Silver Miners ETF | SLVP
I agree with Dottie57. Why did you buy it in the first place? Have the reasons changed? If it were me, I'd sell, but then I wouldn't have bought it to begin with. :happy

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Tyler Aspect
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Re: Keep or Sell?

Post by Tyler Aspect » Mon Oct 30, 2017 8:21 pm

Commodities did well once upon a time in a high inflation era. They get included in back tested portfolio to goose up historical returns. But there were no concrete reasons to include commodities in anyone's portfolio other than driving by looking at the rear view mirror.

I view REIT with similar suspicion.
Past result does not predict future performance. Mentioned investments may lose money. Contents are presented "AS IS" and any implied suitability for a particular purpose are disclaimed.

lynn2000
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Re: Keep or Sell?

Post by lynn2000 » Tue Oct 31, 2017 2:40 am

krow36 wrote:
Mon Oct 30, 2017 7:48 pm
Why did you buy it in the first place? Have the reasons changed? If it were me, I'd sell, but then I wouldn't have bought it to begin with. :happy

We originally wanted to buy gold, just for diversification and for protection against inflation. Then we found out tax rates on commodities are very high, and at that time, we already reached the contribution limit of our Roth IRA accounts. So decided to buy mining funds. I think if precious metals grow, then mining fund would grow. I also did some research on sliver, silver is not only used for jewelry but has more and more practical use now which would cause it to be more precious, of course, silver is more affordable. So that is how we shifted from gold to silver then to silver mining. My husband disliked the red color, whenever he saw that red number, he wanted to sell it. :wink: That is why we are having this discussion.

z3r0c00l
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Re: Keep or Sell?

Post by z3r0c00l » Tue Oct 31, 2017 6:29 am

Was a mistake to buy in the first place, so I would personally sell it. These stocks are volatile and, even though precious metals are useful, their value is highly fickle because value depends also on speculation, not just industrial use. Also consider the massive ecological damage the mining causes. It is common for extractive industries to go bankrupt after mining ends to avoid having to pay for the billions of dollars it costs to deal with the ecological damage of the mines. Governments usually get saddled with those costs, but it is possible some governments won't play nice in the future. With these costs factored in, many mining projects are not actually profitable, just government subsidized extraction.

But if you have a compelling reason to own it, then any short-term drop in value shouldn't change that. If it was good at 15 it should be better at 10! But be prepared for it to potentially go to 5 as it has in the recent past. Another 50% loss is distinctly possible here. I would look at this ETF as "fun money" had I owned any. More of a gamble than an investment, like VGPMX which I considered buying 1,000 shares of just to speculate. Glad I didn't since its one-time 400% leap was never repeated. Apparently its performance was hurt by some issue in the Canadian potash industry. Not sure I want an investment tied to the vagaries of the potash industry.

If inflation worries you, consider I-bonds instead.

fundseeker
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Re: Keep or Sell?

Post by fundseeker » Tue Oct 31, 2017 6:45 am

Just curious, what percentage of your money did you invest in this silver? Hope it was just your "play money" that some of us have to gamble in the market so we leave our real money alone.

Regardless, I'd probably sell at least some of it for the losses, but I would not look to a place with great returns to invest that money now. You may just be selling low and buying high. You know...it does not have to be all or nothing - you could just sell a portion, and put that money back into the market slowly, into something less risky. Good luck!

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Watty
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Re: Keep or Sell?

Post by Watty » Tue Oct 31, 2017 6:54 am

You will likely have more fun gambling in Las Vegas so I would sell it all and go there. :D

Seriously though you should write out an investment policy statement that details why you own what you own and then follow that plan when it comes to rebalancing, or decide to revise your long term investing plan.

/wiki/Investm ... _statement

There are various opinions about owning commodities in your portfolio, much less miners, and many people don't specifically own them as a separate asset class. I have chosen to not own separate commodities since my index funds already have a lot of exposure to commodities mainly through the energy sector(oil, natural gas, and coal) companies that are in the index funds. The materials sectors, like iron and steel companies, also provide some commodity exposure.

I would sell it and put the money into index funds.

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ruralavalon
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Re: Keep or Sell?

Post by ruralavalon » Tue Oct 31, 2017 7:13 am

lynn2000 wrote:
Mon Oct 30, 2017 7:34 pm
We bought iShares MSCI Global Silver Miners ETF SLVP last September, the total loss is 29.66% till today. This is the only fund that lost our money and also the first ETF we purchased. We are debating if we should sell it. One opinion is to sell it and put the money into other fund which has been growing. The other thought is either to leave it there or purchase more of it at much lower price than we paid to bring down the cost. When we looked at the prospectus, SLVP seemingly didn't perform well in the past few years. Not sure what to do, any advice will be appreciated!
This is a very narrow sector ETF so not well diversified at all, it's inherently very risky, it's only 5 years old, has had poor past performance, and is very volatile.

This is not a commodities fund, it invests in stocks of companies in the mining industry.

You made a risky bet and lost. Sell the ETF and move on.

. . . . .

What sort of account is this in? An IRA, 401k, taxable account, etc.? What fund company is the account with?

What other accounts and investments do you have? Please give fund names, tickers and expense ratios.

You can simply add this to your original post using the edit button, it helps if all of your information is in one place.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

minesweep
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Re: Keep or Sell?

Post by minesweep » Tue Oct 31, 2017 7:29 am

I hoped you weren’t influenced by that TV commercial predicting that silver could go to $200/ounce.

JW-Retired
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Re: Keep or Sell?

Post by JW-Retired » Tue Oct 31, 2017 7:34 am

If this was in a taxable account, suggest learning to harvest your losers for the tax write off. You should have sold it last month when the loss was still short term (< 1 yr).
JW
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Jack FFR1846
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Re: Keep or Sell?

Post by Jack FFR1846 » Tue Oct 31, 2017 7:48 am

Gold and silver are both big speculation plays. I completely downplay the talk about "silver is used in industrial things so it should have more demand than gold". I worked for an electronics manufacturer who did all their manufacturing in the US. We used gold for military products. We used zero silver. Yah, I know....it's one company. Another company used Nickle Paladium Gold on the leads of their ICs to prevent tin whiskers growth. Again, no silver.

Not surprised your silver ETF is down. Both gold and silver are way down from 5 years ago. I bought some silver coins (stupidly) right about 5 years ago. I'll sell them at a loss when I finally bring myself to do it.
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DaftInvestor
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Re: Keep or Sell?

Post by DaftInvestor » Tue Oct 31, 2017 8:43 am

Have the reasons that you decided to buy it change? Why did you buy it?
Selling loosers and buying more of winners isn't a strategy to follow but without knowing why you wanted it in the first place makes it hard for people to answer the question. On the other hand - if you are now more knowledgeable about investing and decided you know longer want this investment as part of your strategy then by all means sell. If you don't have a strategy then you need to spend some time to develop one.
Personally - I have $0 in commodities - I'm with Warren Buffet on this one:
"The problem with commodities is that you are betting on what someone else would pay for them in six months. The commodity itself isn't going to do anything for you….it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something that you expect to produce income for you over time." - Warren Buffet

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