by Michael Noonan:
The magic of compound interest is well known. What is lesser known is the magic of the gold/silver ratio, not as a measure as it is mostly viewed, but as an application for increasing one’s holdings substantially, over time. What is so great here is that no magic is involved, rather simply utilizing the market to more than double your holdings.
So-called “Gold Bugs” are considered ardent supporters of the PM [Precious Metal]. Silver stackers are just as avid. Then there are those willing to buy either or both. The chart below is the gold/silver ratio going back 15 years, and this is a hindsight analysis brought forth to the present tense for future consideration that can greatly increase net holdings at almost no cost, those being transaction costs from a dealer.
Consider three investors: 1. a gold-only buyer who loves gold. 2. a silver-only buyer who loves stacking. 3. A buyer of either or both and who wants to maximize what he [she] owns. [Transaction costs are not considered, and some rounding off may occur]. ...