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“Why Invest in Silver?” Reason #1: The Historical Return

         

         Over the past ten years, so many investors have asked, “Why Invest in Silver?”  Investors have seen numerous commercials on TV and advertisements on the Internet talking about the benefits of investing in gold, but not nearly as many commercials and advertisements have been made for silver.  The first major reason for investing in silver is the historical return we have seen over the last ten years.

S&P 500 Historical Returns

Many economists and financial experts have referred to the last ten years as the “lost decade” for the stock market.  When investors examine the charts for the S&P and every other major index from 2000 to 2010, the stock market was flat and if they further adjust the return for inflation, they will find that their return was negative. Effectively ten years of an investor’s investment life is gone with nothing to show for it.  The fact is we have been a bear market for the last ten years and it is far from over.  The average bear market in the US over the last 100 years lasted 12-16 years and unfortunately because of the massive debt load associated with the current crisis, it is likely that the current bear market will last even longer than normal period.

Silver and Gold Historical Return

On the other hand, from 1999 to 2010 silver rose over 760%.  During the same period gold rose 514%.  While other commodities did well during that period, none came close to performing as well as gold and specifically silver. To paint a clear picture, imagine you invested $10,000.  Today if you had invested that in the stock market you would have less than $10,000.  If you had put that in gold you would have $51,400 and if you had invested it in silver you would have $76,000!

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