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 Replies: 9 / Views: 1,634 |
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Pillar of the Community
United States
1450 Posts |
silver to gold. I have been at this for about 8 years now and have arrived at a ratio for my own PM investment of 10 silver to 1 gold. I have not done any math or stats,this is just an empirical result. I have played around with a bunch of different combinations and ratios and have settled on this one as working best for me. Part of it is timing,part of it is premium costs but I think I have gotten the best bang for my buck at 10 silver to 1 gold. The premiums on the gold require a much bigger move to recoup and silver is moving percentage wise faster so they kind of work together. I am only posting this because a lot of the new investors want a plan for investment so,this is mine. Again,this is not scientific or mathematical,just gut and feel over 8 years.
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Pillar of the Community
United States
3670 Posts |
You appear to be good with numbers Hockingzig from what I have read of your other posts, and I bet that 8 years you have put in are solid figures. Or at least I am hoping they are, as I will do some cart wheels if we ever see a 10 to 1 ratio!  Or did I misunderstand that, and you buy 10 oz of silver for every 1 oz of gold? Edited by Silverhawk74
04/28/2011 02:04 am
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Pillar of the Community
 United States
1450 Posts |
Silverhawk,my own personal hoard is a 10 to 1 ratio. I don't think silver will ever quite get there! What I was saying is, over the long haul gold has higher premiums but moves up in bigger increments of value. Silver has a lower premium but moves up in smaller increments. Because of those 2 factors,from an investment standpoint it seems the 10 to 1 ratio has given me the most steady,least volatile performance over the long haul. I don't have a great tolerance for risk,and being retired I can't afford to lose a chunk of cash so this mix has kept me feeling pretty good about the way the metals move. It has kept me from bailing out many times because if I look at my overall investment I have always been ahead of what I have invested ,even with some major corrections. So,that ratio has worked for me. Again,just an observation.
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Pillar of the Community
United States
3670 Posts |
Well, I have added 59 oz of silver and 12 grams of gold thus far, so I figure my ratio is 491 to 1 rof  . Looks like I need to focus on the gold for a while eh, as I like that 10 to 1 ratio, plus you have already put in the 8 years of trial an error, and I as well have low tolerance for big risks.... May need another job to cover the gold tab  .... Edited by Silverhawk74
04/28/2011 02:44 am
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Bedrock of the Community
Australia
21786 Posts |
The lowest ratio of silver to gold I have seen written about anywhere, any time in the history of numismatics, was in the time of Alexander the Great. Alexander had raided the Persian treasury, and was also richly supplied with gold from Macedon, in Northern Greece. These two sources of gold, together, resulted in a ratio of:
12:1
The coins represented by this precious metal supply were the gold Apollo and Nike staters, and the silver tetradrachms with Alexander head with lion head dress, with seated Zeus reverse.
Typically, throughout most of history, the silver to gold ratio has been in the range of:
15:1 to 20:1
It has only been in the last century or so, that this ratio has been 'out of whack'. I suspect that we are still recovering to this range after World currencies had been on a gold standard before about 1930. Currently, the ratio is nearing:
30:1.
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Pillar of the Community
United States
1285 Posts |
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silver is moving percentage wise faster so they kind of work together Overseas at ratio of 30 to 1 a lot of folks swapped out of silver into gold and others are allocating more into gold as silver has become a momentum trade. Be hedged. |
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Pillar of the Community
United States
1450 Posts |
Ceylon 62,I am a low level investor,there are many things I don't understand so I am trying to build a hoard I can let ride until things get economically better. The problem with trading physical gold and silver is every time you get in or out of a position you lose money either to being paid less than spot or paying a premium to get back in,and since I don't have a local dealer I buy through the mail so there are shipping and insurance costs. So,my 10-1 ratio is my design to buy and let it ride. As I said before,this ratio has given me the greatest comfort zone against daily volatility,it probably will not maximize my investment.Again,I don't claim this is a savvy,high return investmen t strategy and as silver climbs I may get more gold to balance and vice versa,so I don't feel I need to be adjusting my investment all of the time.
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Pillar of the Community
United States
4008 Posts |
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Again,this is not scientific or mathematical,just gut and feel over 8 years. Never underestimate the value or the power of "the gut" in life.  Quote:
As I said before,this ratio has given me the greatest comfort zone against daily volatility,it probably will not maximize my investment. Herein lies one of the great secrets to successful investing and that is to make sure that you are comfortable with what you are doing while investing. Whether your silver:gold ratio is ideal or not in terms of its long term profitability is of less importance than the fact that it suits you. As for myself, I have no gold yet and it may be a while before I do. For the time being, I am 100% in silver for my PM investments and am comfortable with that. If I were to invest a large amount of money (think $50k or more), I would definitely work on the silver:gold ratio idea. Not sure what that would be but probably in the area of 20 or 30 to one, silver to gold ounces. |
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Pillar of the Community
United States
1450 Posts |
Ed,I started with gold and built a small hoard of that first,back when gold was $600/oz. but as we went through corrections it was scaring me to death so I got into the silver as a buffer to the drops and over time I evolved to my 10 to 1 ratio. If I were starting today I would start with silver and add gold at about 15 to 1 with a goal of 10 to 1. Again,this is my comfort zone.
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Pillar of the Community
United States
4008 Posts |
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I started with gold and built a small hoard of that first,back when gold was $600/oz. - Hockingzig Kudos on buying at that price level. Good job!   Quote:
If I were starting today I would start with silver and add gold at about 15 to 1 with a goal of 10 to 1. Well, that seems a pretty decent plan too. I might have to consider this one more carefully.  |
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Replies: 9 / Views: 1,634 |
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Posted 04/28/2011 02:16 am
