Friday, 21 January 2022

IS SILVER THE NEW GOLD ?






WILL SILVER OUTPERFORM GOLD? 

With the slew of new fund launches by the Mutual Fund houses on Silver, the spotlight on Silver has shot up.

The topic trending on social media these days has shifted from Bitcoin and Equities to Silver.

 

The SEBI has now allowed Silver to be offered via the Mutual Fund Route.

Mutual Funds now offer not only Equity, debt, Gold, Real Estate but also Silver.

So, now instead of having to depend on the Physical Option of Silver, you can now consider buying Silver via Mutual Funds with even a small monthly investment.

 These Silver ETFs (Exchange Traded Funds) will be listed on Stock Markets and can be bought/sold ANYTIME and even in small quantities.

 

 

SILVER ETFs


Silver ETFs will invest at least 95% of their assets in silver and silver-related instruments i.e., Exchange Traded Commodity Derivatives (ETCDs) that have silver as the underlying asset. Accordingly, Silver ETFs will have a dedicated fund manager having relevant skills and experience in the commodity market including the commodity derivative market.

 

Silver ETFs will have to own physical silver of standard 30 Kg bags with 99.9% purity confirming to LBMA Good Delivery Standards. The exposure to silver ETCDs should not exceed 10% of the net asset value (NAV) of the scheme. However, the 10% limit will not apply to Silver ETFs if they intend to take delivery of the physical silver instead of rolling over its position to the next contract cycle.

 

 

WHAT IS THE OUTLOOK FOR SILVER?

Traditionally, Silver has been a poor cousin of Gold moving in tandem or slightly lesser than Gold but the past 15 months it’s been a completely different story.

 Yes....the way demand for Silver is shaping up....it wouldn’t be a surprise to see Silver demand only going up more and more than Gold in the days ahead  Investment in Silver is done for the same type of reasons as for Gold.

Precious Metal, Rare, Safe Haven, Hedge against Inflation amongst others, albeit at a lesser. 

The steadily increasing usage of silver vis a vis Gold which is purely used for Hedging purposes points to a bullish outlook for Silver. 
  The Gold-Silver Ratio too supports the point that Silver prices could see a spike 



 

NEW USAGE OF SILVER:

Silver is largely consumed for Industrial purposes. 50% of Silver Demand is for Industrial Production (btw, for Gold, the usage is very limited at around 10%).

Silver is largely used in the Electrical and Automobile Industries.

Silver usage which was ZERO earlier in many places are being used in plenty especially where high-pressure heat generation is required, be it Semi-Conductors, Printed Circuit Boards, Wireless communication, aerospace, automotive, etc

 

In fact, Silver is used more in Industry than for decorative purposes.

 

Going ahead, Silver is widely touted to be used in Electric Vehicles, Solar Panels, and 5G Towers.
Silver usage is increasing due to its usefulness in making our Planet Greener and Cleaner. 

Digital technology is creating unprecedented demand for silver which cannot be recycled, almost all digital

Technology products use silver as one of the main components.

The Silver Institute estimates that silver demand from the automotive industry will reach 88 million ounces by the middle of this decade (up from just over 60 million ounces in 2021). In 2040, electric vehicles could even devour almost half of the annual silver supply (currently, a good 1 billion ounces). Yes... 50% of all Silver Supply could well be gobbled up by Electic Vehicles. 

All these are poised for EXPONENTIAL GROWTH and obviously, the biggest beneficiary will be Silver.

In fact, it may not be a surprise if Silver outperforms Gold by a good margin in the coming years.

 

 

DEMAND SUPPLY SCENE FOR SILVER: 

Silver Demand has been increasing quite sharply since 2019 resulting in more demand than supply.


While supply is rising by 8% year on year, the demand has been rising at 15% making a case for Bullishness in Silver.

With increased demand was seen from Solar Energy Sector, Silver being a great conductor of both heat and electricity, the demand for Silver will only increase.

 

The Global economic scenario is improving which will only add to the demand for Silver.

 

Silver supply not matching the surging Silver Demand is a definite possibility. 
Silver, historically, has been MORE volatile than Gold.

Silver and Gold tend to do well when Equity Markets are in the bear phase and thus make a strong case for Asset Allocation.

 

One more POSITIVE for Silver is that, unlike Gold, Silver does not have to face the sword of the threat of selling by Central Banks. World over, all Central banks hoard Gold in huge quantities and often sell tons of Gold to tide over distress times which sharply affects Gold Prices.

 The ratio of silver recycling is far too less compared to Gold: 

 

 

BEST WAY TO SILVER INVESTMENT:

Paper form of investment in Silver is a great form of exposure to Silver not only due to purity factor, taxation, liquidity.




Silver ETFs will be one of the preferred ways for investors to take exposure to silver as one need not worry about the bulky nature of silver, purity, quality, or liquidity of the investment. Silver is among the preferred options globally when it comes to investing in precious metals. This is because silver is considered as a store of value, hedge against inflation and has a very limited correlation with other asset classes

 

Obviously, the best way to get exposure to Silver will be the PAPER form.

Silver is very bulky in nature and there is always a question mark on the purity of physical silver followed by the safety of keeping it and then the liquidity of disposing silver.

All these is taken care of by 1 single form of investment...that’s the PAPER form and hence the Fund of Funds will be a good way to get exposure to Silver

 

 

 

ETF or FUND OF FUNDS:

Many AMCs have now launched Silver ETFs

Silver ETF is a passively managed exchange-traded fund that will employ an investment approach designed to track the performance of the Domestic Price of Silver as derived from the LBMA (London Bullion Market Association) AM fixing prices. As per the SEBI rules, all Silver ETFs must hold silver having 99.9% purity.

 

While both have their pros and cons, the Fund of Fund route outshines.

 

1. In ETF, you need to mandatorily have a DEMAT account

2. In ETF, you will be paying BROKERAGE both while buying and selling

3. In ETF the rates can be volatile and depends on the market movement and demand/supply scenario

In Fund of Funds, no need for Demat account

In Fund of Funds, I don’t pay an entry load nor an exit load

In Fund of funds, the AMC will pay/issue units and no worry or liquidity and no case of Demand/supply scene here

We have observed over the years how Gold ETFs have suffered liquidity issues on stock markets and hence the Fund of Fund route is a better way to take Silver Exposure.

 

Taxation Of Silver ETFs

Gains from Silver ETFs will be treated as short-term if you sell them within three years of purchase. Short-term gains will be added to your income and will be taxed at your income tax slab rate. After 3 years, gains from Silver ETF will be treated as long-term and will be taxed at 20% plus indexation.  Thus, since the indexation benefit is there…your net tax could well be in a single digit.






FINAL WORD:

Silver has always been looked at as a tactical allocation, but the way things are shaping up.... maybe it’s time to have a strategic allocation towards Silver.

 

Silver as an asset class is an investment that makes for a good case for hedging against inflation and with its rising demand, we could well see the days of SILVER outpacing Gold in demand and price rise.


It's a fact that Gold has no PRACTICAL usage and is mainly for decorative purposes whereas



Silver has many practical usages and the usage of Silver is only spreading further, wider and deeper. 

 


People who now say

GOLDEN CHANCE/ GOLDEN OPPORTUNITY

may well change to

SILVERY CHANCE / SILVERY OPPORTUNITY!!

 



Silver is very volatile and hence makes sense to look at silver investment via the SIP / STP mode and also be sure to have the right entry/exit points

It would be prudent to take your Investment Solutions Provider’s guidance as they would be in a better position to guide you appropriately.

 

 

I would only say….
You may not have been born with SILVER SPOON, but you could live and enjoy the rest of your life with a SILVER SPOON with the right kind of investment based on your risk profile and asset allocation.

All the best,

Srikanth Matrubai

 







All the best,
Regards,
Srikanth Matrubai
MUTUAL FUND DISTRIBUTOR
REBALANCE VOLATILITY CERTIFIED COACH
Srikanth Matrubai, Author of the Amazon Best Seller DON'T RETIRE RICH




You are strongly encouraged to consult your financial planner before making any decision regarding this investment. The views expressed here are the author's personal views and should not be interpreted as a recommendation to invest/avoid.

 
And who knows, in the future instead of saying 

Silver is poor man's Gold

they may well say

Gold is poor man's Silver

Disclaimer: the above statement is definitely an exaggeration 

However, my view on Silver is that it could make a better investment than Gold at least for the next couple of years
(These are my personal views. You are strongly advised to take the guidance of an expert and then take appropriate investment decisions. We will not be held responsible as this blog is purely personal in nature and is generic in nature and shared purely for educational purposes)



Srikanth Matrubai Author of the Amazon Best Seller DON'T RETIRE RICH

Do read the book and give your valuable feedback and request you to post positive comments on Amazon. https://amzn.to/3cHUM6M/ 

You can purchase the book on Amazon and Flipkart 

For the best of ideas on where to invest to create Mountains of Wealth 
join my TELEGRAM channel
WEALTH ARCHITECT
    https://t.me/joinchat/AAAAAELl4KUnaJzi-JJlDg/

Friday, 14 January 2022

WEALTH CREATION LESSON FROM COPPER BEECH TREE



Greetings,
My friend on a recent visit to the Lyautey's estate at Thorey noticed a hugely attractive tree and asked the Guide about it.

Brimming with pride, the Guide said..."Sir...this is a Cooper Beech Tree and is more than 100 years old. It was planted by Marshall Lyautey who was a General in Napoleon's army"

The guide continued "General Lyautey used to love GREENERY and possessed an huge garden with variety of trees. One day he and his gardener were looking over the Estate and the Gaint Trees planted there from all over the World. 
Lyautey said to the Gardener "I do not see Copper Beech Tree". 
The Gardener signed and said "It is a slow growing tree and takes more than 100 years to reach maturity. Hence didn't plant".


Without a second’s hesitation, Lyautey said “Then we must plant one TODAY- we have no TIME to WASTE Plant it NOW !!!”.












Just imagine the far farsightedness of the Marshall.
Whoever plants the Copper Beech Tree will never see it fully grown and thus you need REAL LONG TERM VISION to plant it. 

Now, even after planting, after you, someone should take it forward, nurture with patience, love, and care and make sure it actually grows properly.
Besides, the tree during its growth stage will definitely face huge challenges in terms of Cyclones, Floods, Famine, Pest, all of which will play their part in blocking the growth.

But, TRUE tree lovers will go ahead and plant it. 

These trees when fully grown reach heights in the range of 65-110 feet and live for 200 years plus sometimes as long as 400 years.

The tree is truly huge and requires about 5-6 adults holding hands to ring its trunk.

It takes GUTS/COURAGE and real long-term vision to plant a tree that takes 150 years to mature.

True Wealth Creators actually have a lesson to learn from this tree…

You need to have this kind of patience, vision, discipline, faith to CREATE HUGE WEALTH

Actually, to create WEALTH, you don't wait for that long and in fact, you can ACTUALLY SEE AND EXPERIENCE THE WEALTH CREATED BY YOU IN YOUR LIFETIME ITSELF. 

What is needed is Discipline, Vision, Focus and Faith. 

And the magic of you being  WEALTHY AND PROSPEROUS is sure to be a reality.

Do you have that VISION?

If yes...welcome on board.

If No.....then, DEVELOP the Wealthy Habits shared regularly by Srikanth Matrubai on his tweets, Facebook posts, blogs, Telegram channel and no one can stop you from being a SUPER WEALTHY person.

All the best
Regards,
Srikanth Matrubai




All the best,
Regards,
Srikanth Matrubai
MUTUAL FUND DISTRIBUTOR
REBALANCE VOLATILITY CERTIFIED COACH
Srikanth Matrubai, Author of the Amazon Best Seller DON'T RETIRE RICH


You are strongly encouraged to consult your financial planner before making any decision regarding this investment. The views expressed here are the author's personal views and should not be interpreted as a recommendation to invest/avoid.

 
Srikanth Matrubai Author of the Amazon Best Seller DON'T RETIRE RICH
By savings, you’re buying your future.
By borrowing, you’re selling your future. And by investing, you are creating your future.
Read my book DON'T RETIRE RICH and become SUPER WEALTHY by implementing thoughts shared
Kindle version
https://amzn.to/2QRnjNY
Do read the book and give your valuable feedback and request you to post positive comments on Amazon. https://amzn.to/3cHUM6M/ 

You can purchase the book on Amazon and Flipkart 

For the best of ideas on where to invest to create Mountains of Wealth 
join my TELEGRAM channel
WEALTH ARCHITECT
    https://t.me/joinchat/AAAAAELl4KUnaJzi-JJlDg/

IS SILVER THE NEW GOLD ?

WILL SILVER OUTPERFORM GOLD?  With the slew of new fund launches by the Mutual Fund houses on Silver, the spotlight on Silver has shot up....

The MOST Loved book on How NOT TO RETIRE RICH! 4.8 out of 5 stars Order your copy NOW !