Here’s How Investing in Silver Stacks Up—The Perth Mint

The comments below are an edited and abridged synopsis of an article by Anna Golubova

With sentiment around silver looking up following gold’s November rally, the Perth Mint looked at how investment in the precious metal stacks up.

Here’s How Investing in Silver Stacks Up—The Perth Mint - BullionBuzz - Nick's Top Six
Molds with solidifying hot silver. Closeup view. Copper factory workshop.

Silver is down 10.6% year-to-date, while gold is down only 3.9%.

Gold is starting to make up for 2022 after seven months of consecutive losses, and silver usually follows gold into rallies. It is also famous for outperforming gold during bullish cycles and underperforming gold during bearish cycles.

So the results of an LBMA survey are not surprising. It sees silver rising to $28.30 in the next 12 months, a 36% increase from current levels. It expects gold to rise to $1,830.50 in 12 months, a 4% advance from current levels.

The Mint compared silver’s performance with a range of traditional asset classes, such as stocks, bonds, commodities, and gold, from January 1999 to June 2022.

According to that study, the average optimal allocation to silver was between 4% and 5%, with a 5-year holding period.

A popular method of allocation to silver is stacking, or accumulating physical silver bullion or coins over time.

Another advantage of silver is its price compared to gold, which allows investors to build up significant holdings over time by making regular contributions to their stockpiles.

Silver is not just a precious metal. It is an industrial metal used by various industries in technology, science and medicine. Currency devaluation is one reason investors choose to keep part of their portfolio in silver and/or gold.

Between 1971 and 2021, the rate of inflation in the US amounted to 569.2% at an average annual rate of 3.88%. This meant that $1.00 in 1971 was equivalent to $6.69 in 2021.

In comparison, in 1971, silver was $1.54 an ounce. In 2021, it went up to $25.14—an increase of 1,532%. Silver was extremely effective at helping to preserve wealth. However, those gains never happen in a straight line.

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