Precious Metals

Oxford Economics investment advice touts more silver

An analysis of the silver market by Oxford Economics on behalf of the Silver Institute believes a balanced investment portfolio should contain 4% to 6% silver.

Image courtesy of the United States Mint.

A recent report by Oxford Economics commissioned by the Silver Institute suggests a balanced investment portfolio should include 4% to 6% in silver.

The report, The Relevance of Silver in a Global Asset Portfolio, offered projection for silver investment over the next 10 years based on 20 years of data.

Oxford Economics compared silver’s historical performance with a range of traditional asset classes, including stocks, bonds, gold, and other commodities, from January 1999 to June 2022.

The analysis found that found that silver “was shown to have a relatively low historical correlation with asset classes other than gold, suggesting silver’s valuable diversification potential in investment portfolios.”

Furthermore, the study concluded that: “Based on analysis of over 20 years of historic market data, our simulations indicate that an efficient investment portfolio would have had a 4.9% allocation to silver for a medium-risk investor. Moreover, looking forward to the next decade, our baseline economic projections and the strengthening structural demand outlook for silver indicates an even higher medium-risk optimal portfolio allocation to silver of 6%.

“With the average investment portfolio having only indirect exposure to silver of around 0.2% through a basket of commodities, this suggests that investment managers should consider the case for a more significant allocation to silver.”

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