While the silver mania may be nearing a top, gold represents a favorable choice for investors seeking to establish or maintain hard asset protection in their investment portfolios. A variety of factors are supportive of gold including government policies driving continued dollar weakness, solid technicals and positive qualitative supply-demand fundamentals. Gold remains a volatile asset, however, so positions should be monitored closely, particularly if signs emerge that the U.S. dollar is set to strengthen sustainably.
As mentioned in my previous article on the subject, I have been bullish on silver for the last few years. So while the current silver mania is certainly a positive development, it also presents a potential dilemma looking forward. At issue is the fact that a key underlying factor supporting the silver thesis has not changed, which is hard asset protection against inflation and currency debasement. In exiting a silver position, what is the best investment alternative to maintain (or hopefully even enhance) this portfolio protection? Fortunately, the seemingly best choice is also the most obvious – shifting from silver to gold.
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A variety of factors continue to support a favorable thesis for gold going forward.
1. The Rise in Gold Has Been Generally Rational - Gold is NOT in a Mania
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2. Gold is Behaving Rationally from a Technical Perspective
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3. Gold’s Qualitative Story is Positive
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Full Post on Seeking Alpha:
http://seekingalpha.com/article/265084-the-time-to-reallocate-from-silver-to-gold-draws-near
Note: This opinion commentary was posted by Parnell for informational purposes only. Eric Parnell holds paper AG and Au -- this commentary should be interpreted in that context.
Eric Parnell is the Founder & Director of Gerring Wealth Management (http://www.gerringwm.com/), a Registered Investment Advisor based in Pennsylvania and serving clients nationwide. Eric founded Gerring Wealth Management in 2005 with the mission to provide clients with personalized financial planning and investment strategy services at a low cost. Prior to starting Gerring Wealth Management, Eric served as the Director of Investment Communications for SEI Investments, the largest institutional investment management firm in the world with over $100 billion in assets under management. Eric also previously served as an Economist for Moody's Economy.com and as an Research Associate for Economists Incorporated in Washington, DC. Eric holds a variety of distinctions including the Chartered Financial Analyst (CFA) designation and is a graduate of Dickinson College (BS Mathematics and BA Economics) and Drexel University (MS Finance). Eric is also a member of Phi Beta Kappa.
