Requesting opinions regarding hedging physical silver with ZSL

I have some physical gold/silver which I bought years ago for diversification -- it was about 5% of my portolfio then. Thanks mostly to silver, PM's are now about 15% of my portfolio - way too high an allocation. It's a hassle to sell the physical stuff and I'd rather hedge.
I'm thinking of purchasing ZSL (Double inverse of silver) equivalent to half my holdings of silver. And keeping it until silver goes down to a more reasonable allocation (probably about $25-30).

I don't know much about puts and options, so would rather steer clear of that.

Does this make sense as a strategy?

Thanks,

Marty

 

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I'm not a big short investor, but it's my impression that any short fund's performance has to incorporate interest fees in addition to the normal overhead. If you're sitting on physical metal, buying a short fund seems inefficient at best -- it seems like taking out a home equity loan at 6% (or whatever) so you can put money into a CD that pays 1%.

 

I've been thinking about buying some puts on SLV but I'm not sure it is a good idea. I have some physical silver I need to hedge. I've had it for a while and if I did actually sell it right now I don't know what I would do with the money. Land is the only safe place I can think of to put it.

 

2nd ammendment supplies, canned foods, and land.

 

anyone have more input on this?

 

No, it doesn't make any sense. Just sell until you are comfortable. The hassel will be worth it.

 

I agree that physical selling would be easier and probably preferred if you have no numismatic interest in your physical holdings. I am in the same boat, btw, having 20 year old holdings being disproportionate to overall portfolio holdings now. I am looking at physically selling down to a more comfortable level.

 

The thing is, I would rather hold my physical than sell it for FIAT. Gold and Silver are my only physical commodies, and I feel safe holding the amounts I have. I don't want to trade my silver for gold... In this case would it still not make sense to hedge? Pardon my ignorance i'm still fairly new to all this.

 

If you don't trust fiat currency or paper gold and silver, then you should be completely unwilling to trust a fund like ZSL which is a 2X derivative product denominated in fiat. The fund holdings consist of everything you are against in leveraged form. Read the prospectus, and if you completely understand and like the fund holdings, then it is okay to own. If not, the simple course of selling is the better decision.

 

Ok, Thanks for your input