With the global economy seemingly revived, you wouldn’t expect silver to have many cheerleaders as an investment. Think again: its time to shine is now.
There are still presumably plenty of gold bugs among you, but what about silver bugs? How many of you have holdings of physical silver, either stored at home, for which you need a fair bit of space and an elaborate security setup, or more likely with a reliable custodian? And by a reliable custodian I don’t mean a physical silver ETF provider or indeed a burly security guard with knuckledusters. In the last resort an ETF is worth no more than the paper it is written on, and with the global financial system built on shifting sands that is not saying a great deal.
One confirmed silver bug is Ned Naylor-Leyland, a fund manager at Quilter Cheviot whose fund combines bullion holdings with mining stocks. Gold bugs tend also to be silver bugs, he suggests — or, put more simply, people who understand the monetary qualities of metals. ‘Two-thirds of the world’s population live in India and China and they consider gold and silver to be the finest forms of money known to man, not just a store of
value but money as well,’ he says. ‘People who believe in fiat money, in my opinion, are the eccentric ones.
Silver’s price is much more volatile than gold’s, because of its various industrial applications. ‘Silver is strategic in a way that gold isn’t,’ says Naylor-Leyland. ‘We don’t have to have silver as we do water, but it’s jolly useful. It’s extremely price-inelastic. Even if the price were to go up eight times, it’s really not going to make any difference to Siemens or to the military using it in their missiles. They have to have silver and it doesn’t matter what the price is.
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