I should have used my Tiffany’s $100 coupon, which maybe buys a spoon or something…
Yes, yes it is.
SLV down 49% over the last five years. =/
You’re cherry picking. Besides, SLV is a horrible vehicle and SLW is only down 19% over the last five years. Over the last 10, which is about when I got into gold and silver, SLW is up 228%, SLV is up 68%, and GLD is up 116%.
SPY is up 63% for reference.
Why is SLV horrible?
I’ve written about it extensively here before so I’m disinclined to do so again. Suffice it to say, they don’t have the silver they claim they do. It’s a paper vehicle and you’d have zero chance of claiming your metal if the shit ever hit the fan.
PSLV, on the other hand, publishes every serial (I’m blanking on the correct term) number of every bar they store so you know they have it.
And, JPMorgan is a commodities fraud, especially when it comes to silver and they’re the custodian of SLV. Before they were caught (and they were), they would take out huge short positions on their own silver holdings in SLV. Basically they doubled (actually way more than doubled) the size of the silver market by flooding it with paper contracts.
That’s a very simplistic view of SLV and the problems around it and I glossed over pretty much every detail. The gist of it is, it’s okay if you just want exposure to silver as a short-medium term trade. But if you plan on holding it for a long time, stay far far away from SLV.
tl;dr - just buy the physical. It’s fun.
Is it the same for GLD, PALL, and PPLT?
SLV is by far the most egregious of them all, but GLD also has its problems. I don’t follow PALL or PPLT so I can’t comment on those.
While I am not advocating any particular investment over another, I feel a responsibility to address several flaws in your arguments.
First, SLW is a mining company. Using this stock as an investment proxy for silver is like investing in oil by buying KMI or HAL; they are correlated, but they are not the same thing. Buying SLW means that you are taking a view on their business, not just the metal itself. SLV is a more accurate proxy for the spot price of silver, and it tracks spot silver prices very well. Forgive me if I do not think that Blackrock is a Ponzi scheme or accounting fraud that will imminently unravel.
What are you saying about JPM? Are you saying they were hedging their long position? This is a legitimate market activity that occurs in every single asset class - billions of dollars of SPX futures trade every day. Plus, any huge short position that JPM might have taken in silver futures would have affected spot prices as well. So owning physical silver would not have insulated an investor from any adverse price affects. If JPM ws exploiting a price discrepancy by shorting one kind of silver contract against a long position in SLV, they would have been closing the arbitrage and contributing to market efficiency.
I believe you also forgot to consider that SPY has paid some 2% annualized dividends over the past 10 years. So, it’s total return is over 20% higher than the number that you stated above. With this in consideration, it has outperformed spot silver prices over this period. Again, I am not saying that SPY should not have been complemented by other investments. However, what you represented above about their relative returns was not accurate.
I also don’t understand why you do not prefer to use London spot silver as the most accurate metric for tracking silver prices. Naturally, the most accurate investment proxy is the fund that tracks this index the best.