My name is Keith Fitz-Gerald. For more than 35 years, I've worked among the global markets as a consultant, analyst, and trader. I cut my teeth at some of Wall Street's biggest firms, including Wilshire Associates, which oversees more than $8 trillion for over 600 institutional investors.
But today, I'm proud to be the Chief Investment Strategist for Money Morning and the editor of Total Wealth.
My team and I work tirelessly to provide our 1 million daily readers with the guidance they need to protect and aggressively grow their wealth, and today I'm here to give you one of the most important investments you can make to secure your money and bolster the value of your portfolio over the long run.
That investment is silver.
Few investments in history have consistently held their value like precious metals. That is because metals like silver are a safe haven, a hard asset that cannot and will not become worthless due to geopolitical strife, market collapses, volatility, or any other event that would lead to a sharp downturn in the global markets.
Silver is not traditionally an investment that will offer quick, explosive gains over a short period. However, looking ahead, silver has the real potential to see double-digit gains in 2017 fueled by a number of key factors that will bolster demand in the coming months, including one major development my team just uncovered...
It's a nefarious piece of legislation moving through the Department of Labor - one that has the potential to crater the retirement portfolios of hardworking Americans and their families. Not only that, but it could mean the end of the incredibly lucrative Great Depression-era class of investments I call "26(f) programs" that have enabled everyday people build the retirements of their dreams. Click here to learn exactly how to protect yourself before it's too late...
But this urgent development is just one of many moving down the pipeline this year. As such, silver is a "must have" in every investor's portfolio today. Here's why:
Four Reasons Silver Belongs in Your Portfolio
No. 1. Silver Is an Industrial Metal with Robust Demand
Silver is the second most used commodity in industry after oil.
Unlike gold, silver has a significant level of demand thanks to its multiple industrial and medical applications. The versatility of the metal makes it one of the top conductors of electricity and the second best reflector of light after rhodium. One of the fastest-growing areas of industrial demand is the solar panel market.
In 2016, silver demand hit an all-time record high, according to Thomson Reuters. In addition, 2016 marked the fourth year in a row that there was a shortfall of supply against demand and the seventh supply deficit in the metal in the last 10 years.
Silver is a very critical metal in cell phones, silver-zinc batteries, RFID tags, and many more technologies.
No. 2. This Is a Rare Mining Element
Pure silver mines are very rare, which makes this metal one of the more critical investments in the event of global economic disruption. In the event that financial markets plunge, investment in mining is likely to go with it.
Mexico and Peru are the top mining nations for silver and produce one-third of the global output. However, both nations are experiencing challenging economic times, and declining silver production would impact supply.
No. 3. Silver Is Underpriced
Over the last 20 years, we have witnessed robust efforts by global financial companies to suppress the cost of silver. One must remember that back in the 1970s when the Hunt brothers attempted to corner the silver market, the commodity traded at $50.00 per ounce.
The price of silver didn't hit that level again until 2011, when a massive paper raid pushed the price to multi-decade highs. Now, with silver prices falling below $20.00 per ounce, one must realize that it's underpriced for a variety of reasons. First, it costs roughly $25.00 to produce an ounce of silver, meaning that any time that a mining company pulls the commodity out of the ground, it is losing money.
But the bigger sign that it's undervalued is the historical gold-to-silver price ratio. At one point there was a law that fixed this ratio of one ounce of gold to one ounce of silver at 15:1. That figure is a proper measurement of the amount of gold to silver believed to be in the earth's crust.
But today, the ratio is very skewed. Today's gold-to-silver ratio sits at about 1:70.
Many analysts believe the ratio should be closer to the historical average. With gold currently trading near $1,250, silver would need to trade near $86 per ounce.
No. 4. Silver Is Fed-Proof
Gold is considered one of the best inflation hedges for investors.
But too many forget that silver has been the "poor man's gold." Trading at a much lower amount than gold, silver maintains the inflation-proof qualities of the yellow metal and more. The U.S. Federal Reserve and other central banks around the world appear hell-bent on debasing their own currencies. In fact, the U.S. dollar alone has lost more than 98% of its value since the inception of the Federal Reserve.
What do you think is going to happen in the future? The U.S. dollar's erosion in purchasing power will only accelerate with the U.S. central bank attempting to stave off economic calamity. With the dollar's value declining and the money supply expanding, silver presents a fool-proof way to protect your money and bolster your portfolio in the decades ahead.
Where Silver Fits in Your Portfolio
I advocate that investors follow our proprietary 50-40-10 portfolio allocation.
It's a crucial component of our profit-harnessing strategies and the core of my premium research service, Money Map Report. Subscribers to my premium service are granted exclusive access to weekly alerts, monthly reports about this lucrative portfolio structure, and actionable investment research and recommendations producing gains like 207.06%, 100%, and even 362.75%... all thanks to the 50-40-10 portfolio. When it comes to silver, one of the first questions I receive is where precious metals fit in this model and what a proper allocation of silver is.
I recommend that investors consider a 1:10 ratio between precious metals and conventional bond investments. Buying silver isn't a buy-and-store activity, as markets continually shift.
In addition, it's important to stress that you re-assess your positions at least once a year to ensure your portfolio remains balanced.
How to Invest in Silver
There are many different ways that you can purchase and hold silver. These include:
- Coins, bars, or other means of physically holding the metals
- Pooled accounts or certificates that offer unallocated ownership of physical gold and silver
- Futures contracts
- Publicly traded vehicles, like stocks and exchange-traded funds (ETFs)
Given the complexity of the various investment vehicles, investors should look to two of these options: physical coins and bullion or publicly traded vehicles.
The Best Physical Silver Buy
Because silver is so much cheaper than gold on a per-ounce basis, a single coin is within everyone's reach. Coins typically come in one-ounce sizes. The Silver American Eagle (0.999 pureness) currently sells for about $20, and the Canadian Silver Maple Leaf (0.9999 pureness) typically sells for a price similar to that of its American counterpart.
The Best Silver ETF to Buy
The most popular silver ETF is the iShares Silver Trust ETF (NYSE Arca: SLV). The fund backs its shares with about $6 billion in physical silver in JPMorgan Chase & Co. (NYSE: JPM) vaults in London and New York. Each share represents the price of about one ounce of silver.
The Best Silver Trust to Buy
Sprott Physical Silver Trust (NYSE Arca: PSLV) holds silver bullion that is fully allocated and stored at a secure third-party location in Canada, subject to periodic inspection and audits. The only problem is that PSLV makes you pay a premium above the spot price of silver as well. And that premium can be extremely volatile.
The Best Silver Stock to Buy
Silver mining royalty company Silver Wheaton Corp. (NYSE: SLW) is the largest precious metals streaming company in the world (at the time of writing). Silver Wheaton pays about $4 per ounce of silver and $400 per ounce of gold.
Editor's Note: A balanced portfolio with the proper allocation of precious metals is essential to Keith's wealth-building strategy. But there's another type of investment he wants Money Morning Members to know about. It's one of his favorites, a kind of "desert island fund" he'd buy if he had to park his money in one place, "retire" from civilization for 20 years, and come back to a pile of money. Click here to learn more...