Investors always try to focus on two important precious metals, i.e. gold and silver. These two metals are a good choice for investment. As a result, in order to expand the investment portfolio, many investors are allocating their money to buy gold bars or coins and silver bars. Although the choice of precious metals is not limited to gold or silver, some investors even invests on platinum. However, the number of platinum investors is very few.
Should You Go For Gold Or Silver?
The choice to invest in gold or silver is totally one’s personal choice. However, sometimes investment in gold is considered to be better than silver and vice versa.
Usually, the global hoarding of gold is more than silver. Hence, the volatility level gets reduced. This, in turn, stabilizes the value of the asset. Taking a look into some statistics, it could be seen that gold was considered to be a better investment than silver, during the year 2006-2008. In fact, gold investors gained around 10%; whereas silver investors lost around 20%.
Similarly, from November 2008 – May 2011, silver performed better than gold. So, in case anyone buy gold during that time have made a big blunder. Currently, with the demand of gold is on the rise, gold investment is considered to be a better option.
Action of Investors
Shrewd investors always remain interested in risk-adjusted returns. This means investors usually expects to get higher returns when they take high risk. However, if one goes through the market scenario, it can be seen that silver offers a high volatility level. Thus, it isn’t wrong for an investor to look out for high-risk adjusted returns from silver.
Financial gurus might have come up with many claims. However, one won’t be able to bring out exactly what the future holds. Maybe a few years later, gold would be considered for as a better option for risk adjusted investment. Then more number of investors will eagerly buy gold bars or coins.
Why This Assumption?
Many industry gurus come up with the question that why gold is being considered to be a better risk investment. You will need to go through the rest of the blog.
Status as a Currency
One argument that has been placed by the experts is that gold can be considered as an alternative currency to fiat currencies. This argument is not possible with silver.
Although silver is used for many industrial purposes. But its usage is going to slow down in the near future.
Many centralized banks of Asia and Russia are likely to buy gold and not silver.
Although silver outruns gold when speculations run among metal investors. In the near future risky investment on precious metals would remain low-key. So gold would remain the next choice for investment.
Unlike silver, the production of gold is likely to remain in line as per the global demand. Hence, investors can buy gold and use it as their safe heaven during inflation.
Going through the above mentioned facts, it can be said that the investment in gold is always a better option than silver. Before making investment, studying the market is very crucial.