Silver and Gold as Diversifying ETFs

Stocks and commodities have moved in lock step over the past 15 months, thwarting investors seeking to diversify their portfolios. However, silver and gold proved to be able diversifying investments.

In the article Stocks, Commodities Are Unlikely Buddies, the WSJ’s San Mamudi reports that funds that track the S&P 500 are up 26% this year while commodities are up 22%. Both asset classes tanked in 2008 and have declined on an annualized basis over the past three years.

On the other hand, gold was up 6.6% in the period September – December 2008 while the S&P 500 plunged 30%. Over the past three years, gold is up 10.6% on average.

The largest gold ETF is the SPDR Gold Trust (GLD) which holds physical gold. Silver, which has performed similar to gold, can be held through the iShares Silver Trust (SLV).

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