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Second Best

For a number of reasons, Silver has always been considered the ugly cousin to the much more sought-after Gold. Even at the Olympics, when standing on the podium, the bronze medalist is probably just glad to be there. Second place, however, was close enough to have won it all, but ultimately fell short to the one at the top, which spells disappointment. So, does that mean we should also give Silver a miss as investors? Not necessarily.

The differences between Gold and Silver are plenty. The former is a medium of exchange, a store of value, and a safe haven in times of duress, whereas the latter is mainly used in industrial processes. There is also a lot more Silver around than Gold. According to the internet, the entire amount of Silver that has ever been mined is around eight times higher than its Golden counterpart.

Clearly, there is a reason why Gold is trading at a much higher price than Silver, but what really matters is the change in value. This is where Silver gets interesting. Rather surprisingly, both shiny metals have a high correlation and tend to move in the same direction. However, Silver has a higher beta and for the last three decades, has moved almost one and a half times more than whatever Gold has done. In other words, if you are bullish on Gold, then you just might be better off with Silver.


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