The golden rule of investing—"Buy Low, Sell High"—sounds easy until "Low" happens in a violent, panic-induced sell-off like today's. With silver down 13%, many are asking: Is it time to buy?
Rule #1: Don't Catch a Falling Knife
When an asset crashes due to a momentum shift (like the profit-taking we saw today), it rarely bottoms out in a single session. Market psychology takes time to stabilize.
The Strategy: Wait for a period of consolidation. Look for the price to trade sideways for a few days or weeks, establishing a new support level, before committing significant capital.
Rule #2: Focus on the "Floor" (Industrial Demand)
Unlike gold, which is largely a monetary asset, silver has a massive industrial component.
- Solar Power (PV): 2026 is projected to be another record year for solar installation. Silver paste is essential for PV cells.
- AI Hardware: The boom in electronics and chips requires high-conductivity metals.
This industrial demand provides a "hard floor" for silver prices. While speculators may flee, manufacturers must buy.
Rule #3: Dollar Cost Averaging (DCA)
Trying to time the exact bottom is a fool's errand. Instead of deploying your entire cash pile at once, consider Dollar Cost Averaging.
Buy small amounts at regular intervals (e.g., weekly) over the next month. If silver drops further to $80 or $70, you lower your average cost basis. If it rebounds, you've already participated in the upside.
Rule #4: Manage Your Position Size
Silver is a "high beta" asset—it is significantly more volatile than gold. A 13% move in a day is rare but not impossible (as we just proved).
Ensure your portfolio allocation to silver reflects your risk tolerance. For most conservative investors, precious metals should not exceed 5-10% of their total portfolio.