Silver is more volatile than gold. The price volatility of silver can be two or three times greater than that of gold on any given day. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions achieve financial freedom through our website, podcasts, books, newspaper columns, radio programs and premium investment services, including our Gold IRA guide. Just remember that both gold and silver can be risky assets.
As a general rule, they shouldn't represent more than 10% of your total portfolio. From a long-term perspective, over the past 20 years, gold has achieved a return of more than 540%. This is similar to its previous performance during the bull markets of the 1970s. Over the past year, gold has fallen by approximately 3%.
Silver tends to follow the behavior of its cousin, gold, which is less volatile. Over the past 20 years, silver has achieved a return of approximately 365%, but like its precious metals counterpart, silver performed lower than last year, approximately 12% lower. The performance of silver tends to follow that of gold, especially over the past 100 years. Gold and Silver Futures Contracts 101. In this way, silver works like gold as an investment and performs a similar function as a safe haven.
However, silver is an industrial metal and an investment metal, which significantly affects the evolution of its prices and its prospects. It's natural to compare silver to gold as an investment. They share the same strengths of tangible assets, counterweights to stocks and stock markets, safe havens against socio-political shocks and hedges against inflation. However, the two precious metals have several important differences.
While both silver and gold are assets that are not correlated with other securities, gold has an even lower correlation with the stock market than silver. Some gold and silver ETFs include SPDR Gold Shares (GLD), iShares Gold Trust (IAU), Aberdeen Standard Physical Silver Shares (SIVR), and iShares Silver Trust (SLV). While gold and silver have similar boom-bust cycles, there are some key differences you should consider when deciding whether to invest in gold or whether the way to buy gold is to find a licensed precious metals dealer and select the gold coins or ingots and the silver coins or bars that fit your investment needs. Investors can buy shares of publicly traded gold mining companies, companies that produce or extract gold, and companies that participate in any type of operations related to the management of the precious metal.
While short-term fluctuations in gold prices receive much attention, gold is relatively stable as a long-term investment. Any investor interested in buying physical gold can do so by searching for a reputable gold retailer that sells gold bars or collectible coins.