Silver is more volatile, cheaper, and more closely linked to the industrial economy. Gold is more expensive and better for diversifying your overall portfolio. One or both may have a place in your portfolio. Probably the best use of gold as an investment is to reduce portfolio risk.
Both silver and gold can serve as safe investments, but gold tends to have a better track record over long periods of time. In shorter periods of time, however, the specific dynamics of the individual markets become more important for their respective returns. Regardless of which asset you buy, remember that neither asset generates cash flow, so investors might be best served over the long term to take a buy-and-hold approach with a portfolio of profitable and growing stocks. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people achieve financial freedom through our website, podcasts, books, newspaper columns, radio shows, and world-class investment services.
Gold can be prohibitively expensive if you want to buy physical metal. Let’s look at the gold-silver ratio, which tells you how many ounces of silver you need to buy a single ounce of gold. Remember that both gold and silver can be risky assets. As a rule of thumb, they shouldn’t make up more than 10% of your overall portfolio.
Since our founding in 1935, Morgan Stanley has always delivered first-class deals in a first-class manner. Five core values underpin everything we do. While both gold and silver have attractive features, gold is a better investment for the average precious metal investor. Gold has a much larger liquid market, driven primarily by investments and demand for jewelry.
The
price of gold is also less volatile than that of silver. In contrast, the main advantage of buying physical gold (such as bars and coins) is that you own the gold. The demand for gold and silver comes from various sources, with gold primarily being a fixed asset and silver being an industrial asset. Gold and silver may have similar boom-and-bust cycles, but there are
a few key differences to consider when deciding whether investments in gold or the end of the gold standard combined with double-digit inflation have led to an almost mythical rise in the price of gold. While short-term fluctuations in gold prices receive much attention, gold is relatively stable as a long-term investment.
