TABLE: If you still have doubts about allocating a little of your portfolio into silver, these historic gold/silver ratios may make you think twice. Table courtesy of John F. Chown's "A History of Money"
Today the gold/silver ratio stands at 67,98 - I hope to have your permission to round it to 1:68. Now that Markowitz' model of risk-free portfolio diversification has been proven as wrong as did the Black-Scholes option pricing formula, I am more than inclined to seek my clues in centuries old relationships.
It can be safely said that markets either overshoot or undershoot, but are never in equilibrium (can any economist write a formula to scientifically prove my common sense assumption!?) Take your own conclusions.
Toni Straka
Editor, the Prudent Investor
Also by Toni Straka
Toni Straka is an INDEPENDENT Certified Financial Analyst (OeVFA, EFFAS) who worked as a financial journalist for 15+ years and now evaluates global market trends. Analyzing financial and political news permanently he wants to share his insight with those who understand that we are in an era of global redistribution of wealth. The US-European centric approach does not work anymore. Five billion people in the developing countries now demand their fair share of the world's resources.
