Timing is everything and even moreso when the commodity one is dealing with has a fleeting value - and stocks can be considered a commodity of value as well as gold.
The best time to get out of "whatever" is just before the top of the market, and the best time to get in is just after the market has bottomed. That said, getting in/out is one of the hardest things to do perfectly. Often one gets tied in emotionally as well as financially. Ask any of the bagholders who own Worldcom stock.
However, the astute investor can usually see when there is a bear or a bull market occuring.
For most (not all) stocks it is now a bear market (just check the overall numbers since March, 2000). The bottom of this stock market massacre seems a long way off, and probably is. When that bottom is reached, THEN is the time to get back into the stocks - unless you have a really good reason to buy into a particular stock.
In silver and gold, they appear to be postitioned stongly for a bull market, and therefore buying the actual commodity or associated stock is a more prudent thing for the investor who wants to maintain value or even come out making a profit on his risk. One is playing the percentages which one always does in any market. The analysis can be wrong, and in any case it will be a gut-wrenching ride because of the opposition!
Timing and positioning are everything.
Some day - IMHO still quite a long ways off - it will be time to get out of the precious metal and back into telecom stocks. But not today. Gold still seems to be in a bull market despite the recent setbacks.
That said, the precious metals markets have been subject to a lot of manipulation by large traders as well as governments (for their own purposes). This can put you on the wrong side of the boat really quick even though you are on the correct side of the market fundamentals. Therefore, there is a risk involved - especially if the government policy is to hold down the price of gold, which it seems is the case.
Uncle Sam likes his own dollars. He does not like gold - except that stored in his own vaults, if indeed it is still there. Besides, Ole Sam can print dollars cheap and by the ton and foreigners will give us their hard-earned goods for them. Imagine that! Nice trade, as long as they will accept that arrangement.
But the scam can't last forever. As the world gets more awash in the green stuff, they'll demand either more of them or something of equal value. One thing we have going for us is the rest of the world is busy printing their own pretty paper and the big juggling match distracts everybody from the game.
But investing in Worldcom, et al, carries it's own risk too. Therefore, you pays your money and you takes your chance. Or, you can just stick your greenbacks in the bank as electronic digits and let the inflation rate slowly, slowly (and sometimes quickly) eat their value up. Or, you can spend it and let depreciation on your hard goods eat it up. Or, you can take a nice vacation and have a good time and eat it up yourself.
Whotta Country! You have the choice. You can lose your money any way you wish if you have it in excess. Who knows? You might even make a little if you're smart (or lucky).
One thing is sure: you can't take it with you. And somebody is always after it besides you.
Cheers!