Silver the forgotten asset?

Silver belongs to the precious metals but is also used in many industrial applications. Especially in the electrical industry because silver has the highest electrical conductivity of all metals. In addition, it is also essential in the production of solar cells. It is estimated that the trend for clean energy production and decarbonization will significantly increase the demand for silver over the next 10 years.

What many people forget is that silver is a real asset. Investors usually look to the most popular precious metal, gold. Indeed, gold is mainly used as a store of value and not so often in industrial applications. But silver, even if many investors do not have this in mind, has properties that make it a real asset.

But what makes it a real asset?

Retains its value in times of crisis.

Probably the most recent crisis is the COVID-19 pandemic, which caused the financial markets to crash for a short time in March 2020. This has led many investors to move their money into safe havens like gold. Gold was on everyone’s lips and reached a new all-time high of just over $2000 in August. But what about silver? How did silver perform compared to gold and the major indices in the crisis year 2020? The chart below shows the performance of silver against gold, the S&P 500, the DJI (Dow Jones Industrial), and the U.S. Dollar Index DXY.

Performance Covid Pandemic 2020

As you can see, silver is up 45.74% in 2020 and has outperformed the other assets including gold.

Let’s look at the period from 01/01/2009 to 12/31/2011 for comparison. At that time the banking crisis was making waves.

Performance During Banking Crisis

Again, silver has shown the best performance. Silver has increased by 143.13%. Gold has increased by 83.9% during this period. To be fair, it must be said that here not the highest point has been chosen for comparison but the complete period of 3 years.

For comparison, here is the performance of our selected investments from 2001 until today. We see here that gold followed by silver clearly outperforms the other asset classes.

Performance Last 20 Years

Silver has shown that it can maintain its value in times of crisis such as fiat currency crises and can therefore be seen as a safe haven with a clear conscience. Another advantage silver has is that it is cheap. Just about anyone can afford an ounce of silver. Even in the long term, the data show that an investment in silver is worthwhile.

Investors who decide to invest in precious metals can also choose silver as a crisis-proof alternative.

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