DOWHANIUK: Gold, the eternal store of value

The following article is sponsored by Silver Gold Bull Inc

Canadian’s trust in our government is hitting all-time lows, leaving many asking how they can protect themselves financially from government mismanagement and over-reach.

Precious metals have historically played a central role in providing for financial stability. The privacy and security of holding a portion of your hard-earned savings in gold and silver has been proven repeatedly throughout human history. There will be a price to be paid for the reckless fiscal and monetary policy of the recent past, and precious metals are the pre-eminent safe haven in times of turmoil.

In a world marked by geopolitical uncertainty and economic complexity, the allure of precious metals shines brighter than ever. Gold and silver have been used as money and a store of value for thousands of years. As we contemplate the likely trajectory of inflation over the next five years, a key factor emerges: the underinvestment in commodity production over the past decade.

This scarcity of resources sets the stage for inflationary pressures to continue to ripple through the economy. However, the alternative, allowing deflation to take hold, would necessitate defaulting on the pension and healthcare promises made to senior citizens, making the path of inflation and continued financial repression the most likely way forward.

We advocate for investing in best-value, investment grade silver and gold, with an eye on the old maxim: “Prepare for the worst but hope for the best.”

Silver and gold can best be thought of as a way for you to remove the market risk on a portion of the savings you have accumulated through a lifetime of work. Holding physical precious metal in your portfolio allows you to have an uncorrelated counterbalance to the other assets you hold. When stocks or real estate are overvalued like right now, the precious metals you hold will outperform if stocks take a dive.

As we move into a US election year, with society more polarized than ever, the need for stable and tangible assets becomes evident. The specter of war also looms, with conflict zones seemingly appearing around the globe. These geopolitical uncertainties underscore the timeless value of precious metals, historically regarded as safe-haven assets during times of turmoil.

Reflecting on history, the period from 1970 to 1980 stands as a testament to the performance of precious metals. Amidst economic turmoil, high and persistent inflation and geopolitical tensions, gold and silver soared in value, cementing their role as storehouses of wealth. In stark contrast, inflation-adjusted stock returns during the same period faltered, highlighting the divergent paths of traditional investments.

Beyond their role as investment assets, precious metals serve as a personal insurance policy, providing a sense of security in an unpredictable world. One of their most compelling attributes lies in the absence of counter-party risk — a claim that cannot be matched by other investment instruments. This intrinsic value is further augmented by their liquidity; precious metals can be swiftly sold anywhere across the globe, providing a universal and readily accessible store of value.

In the words of Bernard Baruch, a renowned financier and statesman; "Gold has worked down from Alexander's time... When something holds good for two thousand years, I do not believe it can be so because of prejudice or mistaken theory."

This sentiment encapsulates the enduring power of precious metals, which have weathered the test of time as a reliable hedge against uncertainty and economic instability.

Finally, in a period of record high-stock and real estate valuations, precious metals represent one of the few pockets of value left in the investing world.

Silver, in particular, is very interesting. The current gold/silver ratio is over 80:1, meaning that it takes 80 ounces of silver to buy one ounce of gold. At the peak of the 2011 bull market, the ratio was as low as 30:1, wile the late 1970’s bull market saw the ratio as low as 20:1. If we see moves in silver prices anything like past bull markets, silver would comfortably outperform most other investments with the added peace-of-mind that only a physical asset can provide.

The time-tested advantages of precious metals make a compelling case for their inclusion in any diversified portfolio. From their historical performance during tumultuous eras to their potential to mitigate the consequences of reckless fiscal and monetary policy, precious metals offer stability and security. Precious metals provide a safe harbour for your future.

Sponsored content. Bill Dowhaniuk is Sales Director at Silver Gold Bull Inc