Quoted (Live Mint) – Nov 2022 – Silver ETFs: Do you need to invest?

I was recently quoted in LiveMint (26Sep 2022) titled “National Pension System: Should you invest in Tier II account?”.

Here is the link to the online version of the article – Link

Here are a few of the points that I made in the article –

Dev Ashish, Founder, Stable Investor says, “If we look at the historical price trends, then silver is a lot more volatile than gold. Also, the demand-supply forces are quite different for both. But unlike gold, silver isn’t just a precious metal. It’s also an industrial base metal with uses across different industries. The general expectation is that in uncertain times, silver (like gold) will act as a hedge and a safe haven. But due to its industrial use cases, silver is also sensitive to the global economic cycle as well.”

When asked if it is worth including silver in one’s financial portfolio, Ashish adds, “Don’t be in a hurry to invest in silver ETFs just yet. If you have a small portfolio, get the basics like equity, debt, gold, etc. right first. Silver doesn’t exactly behave like gold. So talk to your investment advisor to understand whether you even need silver or not and if you do, then how much to allocate to it.”

“Precious metals should be part of an investor’s long-term portfolio. But the allocation should never be very high as these are portfolio diversifiers and shouldn’t be treated as core assets. A 5-15 per cent allocation can be considered but the exact allocation depends on each investor’s specific requirements and risk appetite. Let’s say if a 10 per cent allocation is to be made to precious metals, then between 7-10 per cent can be to gold and a smaller 0-3 per cent to silver. But if you know what you are getting into and understand the volatile nature of silver, then you may have a higher allocation to silver. It is perfectly fine for most small investors to skip investing in silver totally,” advises Ashish.

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