Thursday, September 03, 2009

Gold vs. Silver vs. U.S. Dollar: Where to invest?

All the talk about investing in Gold since November 30, 2008, I thought that I would show you that while it did move up significantly from the low at the end of November, Silver would have been a far better investment. Looking at the chart above, Gold’s advance ( the Red line) was about a 23% gain, but Silver (the Blue line) had a 62% gain! Now looking at the U.S. Dollar currency (the yellow line) during that same period, the dollar has dropped about 15%. The Dow has gained 10% in that same period, the Nasdaq gained 35% and the S&P 500 gained 17%. Clearly the best gain came from Silver. If inflation does start to creep into the equation (and I believe that is still a ways off), then Silver will yield a better hedge and return than Gold and may even be much better than owning stock securities as this period has shown us in the chart.

On any pullbacks, Silver will lose significantly more than Gold, so one strategy could be to sell Silver before a market correction, which I anticipate over the next 2 months and Buy Gold instead. When the correction appears to be abating and looks like we are in for a rally, Sell the Gold and Buy Silver. But whatever you do don’t keep cash, as it has lost already about 15% of its value.

Labels: , , , , ,


Post a Comment

<< Home

Technorati Profile