Money

Silver and Gold Outperformed all Other Investments after the Financial Crisis of 2008

By Mike Fuljenz – 

 For further proof that silver and gold provide balance and risk protection to average investors, Deutsche Bank just compared the performance of 39 stock, bond and commodity investments in the five years since the major financial collapse of mid-September, 2008.  At the bottom were Greek stocks, but on the top we see our old familiar friends, gold and silver, followed by high-yield (“junk”) bonds and then U.S. stocks.

 Monday morning, September 15, 2008 marked the official beginning of the worst financial crisis since the Great Depression.   On that morning, the bankruptcy of Lehman Brothers led to the collapse or absorption through forced merger of several other leading financial institutions, as well as two of Detroit’s Big Three car companies. Much has been made of the raging bull market in stocks, which began in March 2009. The press has also harped on the “collapse” of gold since 2011, but through all the ups and downs of all global markets in the last five years, the best performers have been silver and gold, not stocks or bonds.  Here are the top five investments in the last five years, using the closing prices on Friday, September 12, 2008.

Investment                              5-Year Gains

Silver bullion                          110%

Gold bullion                           +77%

European high yield bonds     +60%

U.S. high-yield bonds             +58%

U.S. stocks (the S&P 500)     +34%

Source: Deutsche Bank

Gold is a multi-threat long-term investment: (1) A hedge against inflation, an alternative to global paper currency debasement, (2) a hedge against fears of global unrest, (3) a beautiful and collectible luxury item of enduring value and (4) A portfolio diversifier. With a modest position in precious metals, investors can improve their overall portfolio performance while reducing risk. Investors with a modest position in precious metals weathered two major stock market collapses of 2000-02 and 2007-09 without a major drawdown in their net worth.


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