This week, for the first time, the all time silver price high set on January 21, 1980 was exceeded. That high was $49.45. On Monday, April 25, silver soared briefly to 49.85 to set a new all time high. Investors familiar with silver’s history are well aware of the 1980 high near 50. Most of them probably expected silver to resist at or near the old high. And that’s exactly what it did. After briefly making a new high, it quickly fell about 10%, and then almost immediately began to strengthen.

As this is written, it is trading back within 4% of the high. This is very normal, constructive and healthy action for a strong bull market. Obviously, I do not know where the silver price will go from here, whether on to new highs soon or into a longer more protracted correction downward. My intuition is that substantial new highs will be made before any major correction down occurs. This is purely a guess. As I mention almost every month, if you have any significant investment in silver, I recommend you subscribe to Ted Butler’s research service and Chris Weber’s Global Opportunities Report. See the suggestions at the end of the article, What's Next For Silver?

I would not consider trying to navigate this bull market without their guidance.

WILL THE MILESTONE AFFECT MY PORTFOLIO?

Another thing I remind you of almost every month is that I have stopped directly managing investments for the close friends and family members whose portfolios I managed for many years. At 83, it no longer makes sense. Their financial assets, objectives, risk profiles, etc. are all different and need to be considered as they decide how their portfolios should be allocated.

I am willing to disclose how my portfolio is invested and report any changes I make in it. That’s simple enough as I don’t plan to do anything as a result of reaching the milestone. I don’t plan to sell any of my silver at this time. However, this leaves me feeling an obligation to say more, and I have struggled with how best to say it. I have decided to list the conditions under which I would sell some of my silver. Some of you will not need this information, but I pray that it might be of help to others of you.

UNDER WHAT CONDITIONS WOULD I SELL SOME OF MY SILVER?

The purpose of this exercise is to make the point that no matter what the silver bull market does, I don’t want to be placed in a position of being forced to sell in order to meet some other financial obligation, or forced to sell out of fear or the inability to sleep well. I have major gains in my silver. There is nothing more emotionally taxing than seeing tremendous gains evaporate. Here are the specific conditions under which I would consider selling some of my silver.

1. If I were using debt to purchase any of my silver. Years of experience and the study of the Bible have given me this mind set. The Bible has nothing favorable to say about debt that I can find, but does contain many warnings about its use. “The borrower is slave to the lender” (Proverbs 22:7). See Chapter 12 of Biblical Economics. I have no debt. Even if my only debt were a mortgage against our home, I would invoke this rule if the mortgage exceeded 15% of total net worth.

2. If I did not have cash reserves sufficient to carry us through a major correction down (at least 60%) in silver, I would sell some of my silver, or some other asset in my portfolio, sufficient to bring my cash reserve allocation to the level I consider a minimum safe level. I passed this test in 2008 by riding silver down 60% in a short period. I sold none, and even bought more silver near the bottom of that correction. Be sure to re-read this article and ask yourself whether you are prepared to do this: What's Next For Silver?

3. If we were led to give away some portion of our assets to charity, or to distribute some portion to our estate to our heirs, we might consider selling some of our silver.

SUMMARY

Since none of these conditions exist at the present, I have no plans to sell any of our silver at this time. Of course, if I believed silver was selling well above its intrinsic value due to its strong move up in this bull market, I would see it differently. But my conclusion is that the silver bull market is in its early phases and has a long way to run before it reaches a bubble stage. I have adopted Chris Weber’s target price of $187 as the price at which I might begin thinking about selling some of my silver. Until that price has been reached, my sole concern is that I am prepared to hold through any downward corrections, small or large, which may occur, and they most certainly will occur and will not be predictable.

Whether this is the right strategy for you only you can decide. I am suggesting that you carefully analyze your own financial position and goals. Ask the tough questions. Do I have any debt beyond a token percentage of my net worth? Do I have a substantial cash reserve? (Treasury Bills or other super-safe ways of holding cash). Am I prepared to ride through a major correction in the silver bull market without being forced or scared out? By all means, retain enough silver so that you continue to build your wealth if silver keeps rising. But own enough cash so that you won’t panic if it doesn’t.

Finally, for those who have missed all or most of the silver bull market up to this point, but have assets you could commit to an investment in silver, I would urge you to own some silver. A plan for participating in the remainder of this bull market is suggested here. A Dollar Cost Averaging Primer.