Gold to Silver Allocation ratio?

rl
By rl on Thu, Oct 27, 2016 - 4:25pm

Hello Everyone,

What ratios are people allocating between gold and silver?

So, if you buy one ounce of gold,
how many ounces of silver do you buy?

What is the rationale behind your allocation?

Thanks a lot!

1 Comment

MJB's picture
MJB
Status: Silver Member (Offline)
Joined: Jan 5 2016
Posts: 117
Personal

Short Answer: 1:200

Rational:

  1. Usually in a bull market silver leads gold. 
  2. Gold to silver ratio currently 1:70ish; historically this ratio is 1:15
  3. Example: say gold and silver go up 5x. 1 oz gold = $6,500, 1 oz silver = $92. (at current ratios) should be increased demand for silver because it is more affordable for the common man.
  4. Silver has many more industrial uses compared to gold (more demand).

A couple of cautions:

  1. We see countries such as China, Russia and India buying gold, not silver yet.
  2. Gold could be used as money with silver being forgotten and used strictly in industry.
  3. Storage is easier for gold, meaning you could have 70 oz or 1 oz today. Easier to store 1 than 70.

The next question becomes what portion of a person's portfolio should be allocated to physical gold and silver? Many experts say no more than 25%. I can follow this rational but think it depends on the person: risk tolerance, age, income level, portfolio size, storage capabilities...

I am at 20% currently and looking to increase this to 40%

This is just me personally. 

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