Acting on panic never helps investors, but it's still a good idea to question why you're really buying individual investments.
Consider silver stream firm Silver Wheaton (NYSE: SLW ) . Though silver prices show no sign of letting up, you'll find a few of the 2,001 Motley Fool CAPS members weighing in on the company offer reasons to be bearish.
Here at The Motley Fool, we like to consider both the good and bad sides of an investment, so in this article, I'm highlighting three of the main bearish arguments on Silver Wheaton today. Be sure to read the bullish side as well, and then weigh in with your own comments below or rate Silver Wheaton in CAPS.
1. Sell when others are greedy
High-flying silver prices have lead to strong quarters for Silver Wheaton and others such as Coeur d'Alene Mines (NYSE: CDE ) , and 52-week highs at exchange-traded funds such as iShares Silver Trust (NYSE: SLV ) . But it's also bringing more sellers like banks and coin collectors back onto the market which could add to supply. Coupled with the current silver surplus where supply is higher than demand, some investors are looking to cash out of Silver Wheaton while it's still hot.
2. Correction risk
While record-breaking gold prices have brought ETFs such as SPDR Gold Shares (NYSE: GLD ) along for the ride, silver has a ways to go before reaching its record high set in 1980, despite its recent surge. But if the market changes its mind about the direction of precious metals prices, some investors may not tolerate the typically wilder swings in silver, which some believe could spell bad news for shares of Silver Wheaton.
3. Cheaper alternatives
Silver Wheaton has doubled over the past year and -- similar to peer Pan American Silver (Nasdaq: PAAS ) -- is sitting near its 52-week high. Compared to the price-to-earnings ratio of about 20 for low-cost producer Hecla Mining (NYSE: HL ) and the single-digit P/E for potentially prosperous copper producer Taseko Mines (NYSE: TGB ) , Silver Wheaton's multiple of nearly 50 is too pricey for some CAPS members.
To see details of what CAPS members are saying now about Silver Wheaton, just click on over to Motley Fool CAPS and have a look -- or add your own thoughts directly to this story in the comments box below.