About a year ago, on May 27, 2014, I published an article titled What Is A Better Investment Now: Gold Or Silver? There are times when gold is a better investment and there are times when silver is a better investment. This was illustrated in that article with the following chart.
Click here to see an enlarged chart.
In May 2014, I had concluded that gold was a better investment than silver. The chart below shows how accurate that prediction has been. During the one year period since the conclusion, gold has outperformed silver by about 9.61%.
Click here to see an enlarged chart.
Not only gold outperformed silver, it exhibited considerably lower volatility than silver. During the period shown on the chart from peak to trough, silver dropped 31%. In comparison, gold dropped from peak to trough 15%.
The more important question is, “What is a better investment for the next year?”
An important principle I follow is that no one, including me, knows with certainty, what is going to happen next. This has come to be affectionately known as Nigam’s Second Law of Investments. The only thing we can rely on is probabilities. At this time the probability is high that over the next 12 months gold will be a better risk adjusted investment than silver. Here are the reasons for this conclusion.
Central Banks
Central banks, especially those in Asia and Russia are likely to continue to buy gold. Previously during the European sovereign debt crisis, there was a risk that European Central Banks would sell gold to pay their debts. That risk is now in the rear view mirror. …Read more at Kitco.com
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