How Silver Can Help Leverage Gold
Source: Roland Watson, Seeking Alpha (9/19/07)
...since October 2006 silver has been consistently outperforming the HUI. As of last week silver has been outperforming the HUI by a factor of 1.5 to 1.
However, while all this was going on another product designed to leverage the price of gold was quietly gaining ground on the HUI. That product is silver and since October 2006 it has been consistently outperforming the HUI. As of last week silver has been outperforming the HUI by a factor of 1.5 to 1. What does that 1.5 mean? It means that if you had invested an equal amount of money in silver and in the HUI four years ago, your return on silver would be 50% greater than that gained on the HUI....
The suggestion therefore is that anyone wishing to leverage the price of gold should diversify some of their portfolio into physical silver. Not only do they get some leverage on the price of gold but they hold an asset which they know cannot go bust and is not beholden to hedging, large debt, bad management or the caprice of dictators wanting a piece of the gold action.