Why is silver not doing as well as gold (Morgan Silver Dollar Coins)?
December 24, 2010 by
Filed under Silver Investment FAQ
A number of yrs ago I had some guy at Swiss America study my profile and he strongly encouraged me to invest in Morgan Silver Dollars instead of gold. I was looking to get into precious metals a little bit.
I was very middle class and looking to make a good investment. I am now lower middle class. I don’t feel bad about the investment cause I do plan to keep them for many years and hope someday they are worth a lot more. But it is annoying to hear how great gold is doing and to never hear anything about silver. I wonder why the swiss america guy didn’t steer me towards gold?
It makes me a little mad cause I am sure he encouraged wealthier people to buy gold—-the rich get richer as they say?
So what is going on with silver? Why is it not doing as well? What does the future look like in terms of the value of Silver?
Thanks.
Silver is the poor man’s precious metal. It never does as well as gold. And I think it’s pretty much been that way throughout history. And that is what you should have expected. I have half a dozen (gold) Krugerrands bought in the early 90’s at $375 an ounce and 5 – 6 dozen Morgan’s. But I’ve always considered these as more of a speculation, than an investment.
As long as there is economic uncertainty, I suspect silver & gold will continue upward. But I also think they are likely in a bubble, and will come crashing down someday. Personally I think my stocks & mutual funds are a better long term investment.
The value of silver (like most commodities) will increase as more people gain confidence in the recovery. In my opinion there are two reasons why the price of gold has been rising quickly in the last few months. 1) Many people are losing faith in the American dollar, it’s depreciating quickly, and as a result investors want a haven. 2) The media. The people buying gold now aren’t the ‘professional investors’, most of us sold when gold hit 1050. The people buying gold now are inexperienced and over optimistic ‘investors. People are going to wake up one morning and realize that they paid too much!
People who watch Gold/Silver price ratios feel that silver is very undervalued, so I would not feel badly about holding it. Silver is much more volatile than gold. Lots more of it is mined, lots more is stashed away. and lots more is used in photographic media, jewelry, medicine, and electronics. So the price fluctuates a lot, but as paper money marches toward the value of toilet paper, silver cannot not help but retain and even increase in value.
Grandpa
The rarer silver dollars — and rarer coins of any denomination — tend to be a better investment if you can afford them.
The cost of silver per ounce has always been lower than gold (historically the ratio is something like 13 to 1) and therefor it is more affordable to the average investor. If you look back five or six years silver was selling around $3 per ounce and gold was selling around $375 per ounce. Today silver is around $17 a better than 550% return on your investment and gold is around $1100 for something just short of a 300% return on your money. Silver is the winner if you look back to when the big run up began.
Your problem is that investing in precious metals and investing in collectible coins are two different things. Successful investing in coins requires an intimate knowledge of the collectible coins market. By collectible coins I don’t mean common date Morgans or any other common date silver coin. You need to look for rarity in available pieces as well as grade. Overall the coin market has been on an uphill trend, even for the more common stuff, for the last five or six years. But the ability to make real money from this trend is strictly dependent on your choice of coins, with true collector rarities leading the way.
In my opinion the guy at Swiss America did you no favors by directing to coins rather than bullion. The only caveat is that I think collector coins will hold their value a little better than bullion if the market turns down.
Gold is a more precious metal with better confidence of people generally.More over it is back bone of the economics of any country in the sense the value of the currency of that country depends on the stock of Gold with it.There are many other reasons why silver is lagging behind.Can not explain here in shortly.