![]() Oxford Economics said that in order to examine the potential long-run benefits of holding silver in a portfolio, it compared its historic performance with a range of traditional asset classes, including stocks, bonds, commodities and gold for the period January 1999 to June 2022. Undertaken by independent economic advisory firm Oxford Economics on behalf of The Silver Institute, the report’s findings are especially interesting, given the fact that silver is often overlooked in favour of gold when making decisions about alternative assets. A new report has not only validated the practice further, but also provided guidance on the optimum allocation to the precious metal within a balanced portfolio. How much silver is enough?Īs stated earlier, growing a stockpile of silver over time is a stacker’s major objective. They’re comfortable in the belief that even though the overall value of their silver will go up and down, ultimately it’s a form of insurance against investment risk that also helps them stay ahead of the inflation curve. Silver stackers and other long-term investors tend to be less concerned about such rapid peaks and troughs. But on both occasions, panicky buyers suddenly bought up silver to compensate for losses elsewhere, pushing the price significantly higher for a while. Theoretically, a recession should be bad news for silver as reduced economic activity means less demand from industry. Silver spiked again in 2011 during the recessionary aftermath of the global financial crisis, and to a lesser extent in response to the economic downturn caused by 2020’s ‘great lockdown’. But the Hunt brothers’ strategy suddenly unraveled, in part due to new restrictions on margin traders, and the price crashed, dropping over 50% in just four days. Prices began skyrocketing in 1979 and by January 1980 were rapidly heading towards USD 50.00 per ounce. Relying heavily on margin loans to fund their purchases, it’s estimated they gained control of about one-third of the entire global supply of privately-owned silver. The Hunt brother’s response was their infamous attempt to ‘corner the market’ in silver. In the 1970s, billionaires Nelson Bunker Hunt, William Herbert Hunt, and Lamar Hunt worried about the effect of US inflation on their wealth, a huge sum they’d inherited from their oil tycoon father. Graph showing year highs for the silver price in US dollars 1970 to 2022. In fact, silver had some dizzying surges and some disheartening slumps. Of course, the price of silver did not rise in a straight line during this period. Using these numbers over this timeframe, it can be seen that silver was extremely effective at helping to preserve wealth. ![]() Fifty years later, an ounce cost USD 25.14, a 1,532% increase. The cost of one ounce of silver in 1971 was USD 1.54. This meant that USD 1.00 in 1971 was the equivalent to USD 6.69 in 2021. Between 19, the rate of inflation in the United States amounted to 569.2% at an average annual rate of 3.88%. The Zimbabwean dollar and Venezuelan bolívar are two recent examples of currencies to have been shattered by rapid inflation.Įven the world’s most heavily traded currency – the US dollar – is vulnerable. Silver stackers are acutely aware that over time, currency may lose its purchasing power due to inflation. Silver has the advantage that it is cheaper per ounce, allowing stackers to build significant holdings by making regular additions to their stockpile over time.ĭemand for silver is not only driven by investors – it also benefits from diverse and growing uses in industry, technology, science and medicine.Īnd silver can also be fun to collect – the multiplicity of coins and bars available giving it a hobby-like appeal. Silver offers stackers many of the benefits of gold, with some important extra advantages.īoth precious metals represent ‘hard’ assets they physically own, thus insulating them from the counterparty risk associated with paper investments.īoth are relatively rare, and because they cannot be created by governments are considered to be the ultimate forms of money - meaning they will outlast fiat currencies which may eventually fall victim to inflation. Simply put, a silver stacker accumulates physical pieces of silver bullion over time, quite often until it meets a predetermined percentage of their overall assets. ![]() One tried and trusted method of silver investing is known as ‘stacking’. Gold tends to get all the glory when people look for an investment with a low correlation to traditional assets such as stocks and bonds.īut many invest in silver as an inflation hedge and to help protect the overall value of their portfolio in times of economic turmoil.
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