# "Hedge"



## PalmettoTree (Jun 8, 2013)

Prepping is all about hedging against losses that we might sustain during a SHTF. We each work toward that as we acquire guns, food, water and replenishment when consumed. But when it comes to investing most do not hedge. It seems an all or nothing mind set.

So my question is this. Regardless of what kind of financial security investments, what ratio would you use per $10,000 of conventuals security net worth?

Example: if you have $10,000 in savings you might say $100 in silver at spot. That would be a 100:1 ratio.

Now I know some of you are all into PM. Pease do not turn this into why you are "all in" that mule has been beat to death.


----------



## Denton (Sep 18, 2012)

Kind of silly to ask a question and then tell someone they are not allowed to use a particular ratio, dontcha think?


----------



## Denton (Sep 18, 2012)

To answer the question, 30% paper is in PSLV.


----------



## PalmettoTree (Jun 8, 2013)

Denton said:


> Kind of silly to ask a question and then tell someone they are not allowed to use a particular ratio, dontcha think?


No, I know there are plenty of people that only save PMs. That puts investing and saving at 0:100 percent. That is not nearly the priority they place on other forms of prepping.


----------



## Denton (Sep 18, 2012)

PalmettoTree said:


> No, I know there are plenty of people that only save PMs. That puts investing and saving at 0:100 percent. That is not nearly the priority they place on other forms of prepping.


True that.


----------



## Inor (Mar 22, 2013)

Denton said:


> To answer the question, 30% paper is in PSLV.


Out of curiosity, why do you favor PSLV over SLV?


----------



## Go2ndAmend (Apr 5, 2013)

I don't know what you mean by PSLV or SLV, but my ratio is around 250 to 1. I wish it was lower.


----------



## Inor (Mar 22, 2013)

Go2ndAmend said:


> I don't know what you mean by PSLV or SLV, but my ratio is around 250 to 1. I wish it was lower.


Ticker symbols for exchange traded silver. If you are just playing the moves in the price of silver it is much cheaper to trade "paper" silver than the physical metal. Obviously for prepping, the physical metal is the way to go. But some of us buy and sell securities just as a hobby for fun.


----------



## PalmettoTree (Jun 8, 2013)

I keep 250 shares in SLV in my portfolio as a reference. My silver is in my coin collection. I do not watch the spot prices as a routine. SLV keeps that number in front of me. I do most of my trading 12/31 or 1/2 when I do my annual balance. During down turns like a week or so ago i's shoot the dogs that cannot keep up and trade up on yield. No need to research since that was done during rebalance.

The point of hedge funds is to prevent losses but also limit gains. That mostly seems counter productive the way the big boys hedge.

When we prep we do not neglect our day job lives to prep. We hedge that that life will not always be there. It seems from a prepping perspective we should hedge our net worth in the same way. I'm having trouble putting a number on that.


----------



## Inor (Mar 22, 2013)

I have had a financial advisor for many years that takes care of our retirement money. But, being a computer dork and statistics dork, I play with some stocks, ETFs, and options just for fun. I never have enough money in my "play" trading accounts to do any damage to our long-term plans even if I lose it all. But, over the last 15 or so years I have been doing it, I have made some pretty decent returns on my plays as well as lost my ass on others. But overall, I have been able to take money out of my "play" account and move it into my "real" account. So, I am up overall and have had a hell of a good time doing it.


----------



## Denton (Sep 18, 2012)

Inor said:


> Out of curiosity, why do you favor PSLV over SLV?


Sprott's ETF is supposed to be backed by the real stuff.

I don't trust a thing about JP Morgan.


----------



## Inor (Mar 22, 2013)

Denton said:


> Sprott's ETF is supposed to be backed by the real stuff.
> 
> I don't trust a thing about JP Morgan.


I heard rumors about that several years ago, but then nothing.... Hmmmm...


----------



## Denton (Sep 18, 2012)

Inor said:


> I heard rumors about that several years ago, but then nothing.... Hmmmm...


When I started buying PSLV, Sprott was having difficulty buying the metal, and it took him a while to get all that he ordered.

Notice how PSLV isn't valued at the price of an ounce? Each share isn't advertised as being equal to a full ounce.

At the end of a really crappy day, though, I expect both to go down the tubes. If you don't have it in your hands....

Still, I enjoy paper. Trading is fun.


----------



## Inor (Mar 22, 2013)

Denton said:


> Still, I enjoy paper. Trading is fun.


Indeed Sir!


----------



## inceptor (Nov 19, 2012)

Denton said:


> At the end of a really crappy day, though, I expect both to go down the tubes. *If you don't have it in your hands....*


That's my biggest issue. That's why I buy mine the way I do.


----------



## PalmettoTree (Jun 8, 2013)

I think we all come up with games of sorts that are too risky for all in but help us to understand how the market works.

Once we retired I quit that and dialed my investing risk down a notch.


----------



## StarPD45 (Nov 13, 2012)

Just remember that the ratio is about 80 - 1. 
Paper to physical metal on the exchanges. 
If everyone decides to sell their paper, some are going to get screwed.


----------



## PalmettoTree (Jun 8, 2013)

There is no justification for a gold:silver ratio. Silver is used in industrial consumption. Silver is replacing gold to a degree in the consumption for jewelry. Gold has no major consumption uses except for high end jewelry. My opinion is gold is overbought. 

As for paper silver like SLV (ETF) I cannot see the problem you suggest. If you are talking about companies that let you buy fractions of an ounce and hold the PMs for you, I agree! We have had several go bankrupt in SC and the owners go to jail in SC.


----------



## Ripon (Dec 22, 2012)

Some,time back, guess about 15 years ago when I made more money my wife talked me into a good life insurance policy. It was for her, and I am glad to have it still. It's a hedge. We have always taken advantage of retirement savings options by employers or the govt ( IRA). At this point about 15 yrs back I calculated we saved $5k a year in retirement, and paid $3k a year for auto, home and life ins. $8k a year for "good times" but how much for bad? I figured about a $1k per year budget back then for prepardness options like ammo, silver, gear like BOBs, bikes even and anything that was worthy of stocking up. When I went into business for my self it stopped. When I went broke in business for myself it came in handy, and I'm glad to say it's now a bigger focus. I'd say we,spend 5% of our take home on preparation, and we still put more than that into retirement.

PS the cost of PSLV is probably comparable to the commission paid on bullion. It's a cheap way to use silver in a stock port.


----------



## PalmettoTree (Jun 8, 2013)

You will never find a harder person to work for than yourself. Being self employed is tough. There are a ton of employee benefits that are not factored into the pay check you receive as an employee. Providing these for yourself is neither cheap nor easy. I was (I should say we were) in business for our selves from my age of 38 to 43. I did not bankrupt us but I was not saving for our children's college. We had no retirement savings. The whole effort was hard on my children.

I took a job at 43 and was able to retire at age 60. My wife retired at age 60 also. She is four years younger than myself. When we retired each of us were saving into 401k plans 25% of our gross.

I am so thankful God delivered us from my foolishness.


----------



## nephilim (Jan 20, 2014)

In terms of proper savings and investments, I have £23'000 in savings ready for a mortgage on a nice house over here in the UK. 
In terms of precious metals, I have taken them to a valuation centre for PMs in the UK today (in London) and they come in at £4'975, £1'300 in gold, £900 in silver, £800 in bronze, £400 in platinum and just shy of £1500 in iron, steel, copper, aluminium, tin, zinc, nickel, cobalt and lead.


----------



## PalmettoTree (Jun 8, 2013)

nephilim said:


> In terms of proper savings and investments, I have £23'000 in savings ready for a mortgage on a nice house over here in the UK.
> In terms of precious metals, I have taken them to a valuation centre for PMs in the UK today (in London) and they come in at £4'975, £1'300 in gold, £900 in silver, £800 in bronze, £400 in platinum and just shy of £1500 in iron, steel, copper, aluminium, tin, zinc, nickel, cobalt and lead.


Where in the UK do you live or plan to buy?


----------

