Friday, November 19, 2010

First IRA swap

The gold/silver ratio dropped below 50 today. It dipped down this far a few weeks ago, but only momentarily, and I missed the opportunity to trade below 50. This time, it looks like it might actually hang out down there. I traded a quarter of my SLV for GLD. I considered IAU instead, since Soros went that route and their expense ratio is lower, but ended up just sticking with GLD. Maybe when and if the ratio breaks through the next resistance (~45), I'll move a chunk of SLV into IAU.

This is an interesting experiment: to see if a sterile, inflation-proof investment can actually produce a return through arbitrage. Next trade will be either a third of my SLV to GLD if the ratio goes under 45, or a quarter of my GLD to SLV if it goes over 60.

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