Silver, the white precious metal and close cousin of gold, has always got step-motherly treatment when compared to the yellow metal. Most of the investors hold gold as a hedge against economic downturn while silver is generally neglected. But does silver also have the same property like gold and can investors use this to diversify their portfolio? Our study of daily returns of gold and silver in USD terms since the start of 1980 shows that there is a correlation of 0.72 between them, which means they move almost in tandem. Therefore, logically speaking, silver can also be used in place of gold as an asset for diversification.
The testimonial to this is the gain in the price of silver last year during the period of economic uncertainty, just like the gain in the gold price. Silver reached a seven-year high in the month of August 2020 as concerns about a weak dollar and declining bond prices thrust investors to safe-haven assets as vagueness about the economy remained.
The price of silver has not declined much since then and is still trading above USD 25 per ounce, though it has come down a bit from its recent peak of USD 30 per ounce. If we compare the price rise of gold and silver since the start of 2020, silver has gained almost twice as much as gold.
Although the economy is a stronger footing now, the price of silver has remained intact. It is still trading at about USD 25 an ounce, more than a 50 per cent increase compared with last year and about a 70 per cent rise from five years ago. One of the reasons for such a performance is that the white metal has a peculiarity of acting as both base metal as well as a precious metal. It has immense industrial use. It is estimated that 56 per cent of the silver is used in industrial production and thus its price behavior is often linked with the state of an economy. The global economy according to International Monetary Fund is projected to grow at 6.0 per cent in 2021 and 4.9 percent in 2022.
Continue reading your story on the app
Continue reading your story in the magazine
Post Office Savings: Are They Worth It?
When it comes to making investments, most people are attracted by the flashiness of the equity markets and mutual funds. What India Post has to offer is usually ignored. The article takes a deeper look at the various postal savings schemes and compares the risk-adjusted returns to conclude if they are good enough for investors.
The Importance Of An Emergency Fund
Prabin Agarwal Founder & CEO, Prabin Agarwal - Empowering Investments
Economic Normalization Kicks In
BSE Realty index skyrocketed by a whopping 22.44 per cent during the fortnight to hit 11-year high of 4,121.22.
Chinese Growth Curve Takes A Downward Turn
China factory activity has shrunk for the first time in September since the initial corona virus outbreak in February 2020
Steady Stocks Are For All Seasons
When market volatility is on the rise, it is the low volatility stocks that come into high demand. But the question that investors need an answer to is whether the low volatility stocks outperform in the long run on a consistent basis. Shreya Chaware throws some light on the subject that matters most to long-term investors i.e. consistency in low volatility stocks
Stay Focused on Your Goals
Hemant Rustagi Chief Executive Officer, Wiseinvest Pvt Ltd.
VARUN BEVERAGES: BEING IN A COOL SPOT
Soft drink consumption in India is observed to be on a steady growth trajectory. Rising young population, low per capita consumption, improving retail penetration across semi-urban and rural markets, better agro-economics and rising trend of at-home consumption contributes to make it an attractive growth market. This is what gives Varun Beverages its healthy growth outlook
Volatile Swings Of Fortunes
Which stock index is the most volatile one? In the following article, Armaan Madhani takes into account the nature and effect of volatility and points out why volatility is an investor’s friend
Rural Demand To Push Commodities Market
One of the triggers for rural demand is that the agriculture ministry has projected a good crop in the first advance estimates for the Kharif season at over 150 million tonnes
Will Automotive Stocks Change From Slow Lane To Fast Lane?
Automotive stocks have had a special emotional value for those investors who have been investing in the markets for more than two decades. The likes of Bajaj Auto, Ashok Leyland, Hero Motors, Eicher Motors and Tata Motors have created humongous wealth for its shareholders. However, the industry has gone through a rough patch over the past few years. The silver lining is that there is the likelihood of electric vehicles changing the fortunes of the industry. Yogesh Supekar explains why a fresh and open-minded view on automotive stocks is required at this point of time
Responsible-Investing Pioneer Lydenberg Says ESG Needs An Upgrade
STEVE LYDENBERG’S passion for social change was inspired by anti-Vietnam War demonstrations, consumer boycotts, and the movement to divest from apartheid South Africa. But he didn’t take to the streets. Instead, Lydenberg turned to the world of finance to help catalyze societal change.
Does New Cash Make Stocks Go Up?
Theory said more investors coming into the market doesn’t matter. Then meme stocks hit
DON'T LET SOCIAL SECURITY STEER YOU WRONG
Few retirement decisions are as critical, or as easy to get wrong, as when and how to take your Social Security benefits.
Hot Shorts Summer
Traders who bet on bad news are the necessary foils of meme stocks
Who Really Gets Rich From Robinhood
The app makes millions funneling inexperienced investors to Wall Street traders. Did Alex Kearns pay with his life?
Bet On Infrastructure Stocks
On the heels of a $1.9 trillion COVID relief bill, President Joe Biden has unveiled a major infrastructure initiative that would spend $2 trillion over eight years, financed in part by an increase in corporate tax rates from 21% to 28%.
Did Anyone Hear a Pop?
Investors are worried that stocks are in a bubble— and that it’s going to burst.
How To Build (Or Rebuild) Wealth
Our 11-part plan will help you establish a solid financial foundation or take stock of your progress.
AMERICANS CAN PAY THEIR CREDIT CARD BILLS, BUT FOR HOW LONG?
The coronavirus pandemic hasn’t stopped Americans from keeping up with their credit card payments, thanks in large part to government relief programs passed by Congress earlier this year.
Getting More from Less
Everyone has been forced to cut back in some way—but limitations can lead us to even greater growth. We asked six entrepreneurs: What unexpected benefits have you gotten from change?