Gold Alternative #3: Silver
Silver has tracked gold pretty closely, roughly tripling in the past five years and quadrupling in past last decade – just like the yellow stuff. But the metals do not move in complete lockstep, as we saw this spring when silver “crashed” from $48.70 to $32.50 in just eight trading days. The good news is that disparity can work both ways, and that’s appealing if you’re looking to diversify your hard assets a bit beyond the gold market.
For all you investors preparing for the apocalypse, physical silver has actual currency potential if you truly believe the dollar will become worthless. After all, how do you buy inexpensive essentials like food or clothes with a gold bar worth thousands or a gold coin worth hundreds? Silver is much more practical.
Silver traded below $7 per ounce about five years ago, but the metal now is pushing $40. As mentioned, silver rolled back from 30-year highs near $50 per ounce in early 2011, but the metal appears to be rebounding with almost 20% gains in the past 10 weeks.
Investing in silver is easy if you’re familiar with gold investing strategies. Silver has trust ETFs, such as the iShares Silver Trust ETF (NYSE:SLV) and the smaller ETFS Silver Trust (NYSE:SIVR), which are pure plays on silver. A few miners also are primarily silver-focused. One of the largest is Silver Wheaton Corp. (NYSE:SLW), which is up about 80% year-to-date and about 520% in the past five years. Others include Pan American Silver Corp. (NASDAQ:PAAS), up 25% year-to-date; Silvercorp Metals Inc. (NYSE:SVM), up 28%; and Mag Silver Corp. (AMEX:MVG), up 33%.
Of course, if you’re looking less for an investment and more for a hedge against chaos, you can stock up on silver bars and coins to store beside your gold heap.