Silver Investment: "Buy and Hold Beats Trading"

SILVER TRADING can be so volatile, it's known as "the devil's metal...gold on crack" joked HSBC Bank's managing director of Global Metals & Trading John Levin at a London conference on Wednesday.

Opening the Financial Times' inaugural Silver Investment Conference, held at the London Stock Exchange, Levin said the metal remains "as big an enigma to me now" as when he started trading precious metals 18 years ago.

"We have hedge-fund clients who run home to mummy and trade Natural Gas after trying to trade silver!" Levin told the fund managers, analysts, product developers and senior mining executives attending the conference.

Thinking that trading silver simply means tracking gold, "People look at silver and think it's an easy market," he explained.

"Those people get carried out on a stretcher."

On a daily basis, Silver is typically 1.75 times as volatile as Gold according to analysis by Bullion Vault. "The difficulty is withstanding that volatility," Levin told the FT's Silver Investment Conference this week.

"Buy and hold has been a very profitable strategy in Silver since the [global financial] crisis began...If you bought silver on cash, then a 2% drop wouldn't bother you. But with leverage, in the futures market, that becomes a 10% drop or worse."

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