Silver: All That Glitters Is Not Gold

You likely have read about the recent collapse  in the price of Silver.  It rode the coattails of other precious metals recently, most notably Gold.

It’s recent peak of ~ $46 a troy ounce just a couple weeks ago (it’s currently ~ $30 a troy ounce) is testament to what happens when a sell off is triggered.

Bubbles will always happen.

We will never be immune from them.

The key is not buying into any single asset in disproportion to our goals and not buying into an asset out of fear.

Silver Bulls are touting it as an alternative currency class to Gold, and tout the same logic applies in valuation:  It’s not a fiat currency, it has intrinsic value, and thus, it should be incorporated into a portfolio.

While I agree precious metals can have a place in a client’s asset allocation, it usually comes as a hedge against inflation, and rarely would it make sense to become a holding in the double digits.

(Disclosure: I am a Fee-Only Financial Planner.  My website is here.)