Mother nature, one could say, is the ultimate asset allocator over a long enough time span. Going by that notion, silver is very undervalued versus gold.
Silver bar and coins
Silver is about 16 times as plentiful in the earth’s crust as gold, according to John Stephenson, author of the “The Little Book of Commodity Investing.”
Yet, the price of gold [GCCV1 1420.40 -5.80 (-0.41%) ] per ounce currently trades at about 38 times that of silver [SICV1 37.085 0.036 (+0.1%) ].
According to the basic laws of supply and demand, especially given that the two metals are quite similar, the price gap between the two metals should be much smaller.
“It basically has the same physical characteristics of gold as a store of value and it also has an industrial kicker,” said Stephenson, a portfolio manager for FirstAsset Management in Canada. “For my money, the trade of the decade will be in silver. Gold was the best investment over the last decade, but in the future, silver will be the go-to investment for investors looking to ride out the current storms in the global economy.”
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