http://www.smartmoneydaily.com/investing/want-to-increase-your-profits-and-lower-your-risk-at-the-same-time-think-precious-metals.aspx An Offbeat Look at what Makes the World Go Round Tue, 16 Mar 2010 18:15:46 +0000 http://wordpress.org/?v=2.9.1 hourly 1 http://www.smartmoneydaily.com/investing/want-to-increase-your-profits-and-lower-your-risk-at-the-same-time-think-precious-metals.aspx/comment-page-1#comment-470 Jason Dean Mon, 13 Aug 2007 07:27:26 +0000 http://www.smartmoneydaily.com/investing/want-to-increase-your-profits-and-lower-your-risk-at-the-same-time-think-precious-metals.aspx#comment-470 Yes, you are correct, but investing in the S&P is much riskier than investing in a diversified asset mix, including gold and silver. The Sharpe Ratio is a measure of return over risk, and it's important because even though it may seem better to invest in the S&P with an 11% return, your time horizon has to be infinite (or at least, very long) to be confident in that return. For example, from 1971 to 2004, gold-silver-platinum was a better investment more years than the S&P was. If you invested in the early seventies with a horizon of ten years, the S&P would have been a very bad investment for you. A diversified asset mix of stocks, bonds, cash, and precious metals provides the best risk-adjusted return; at least, historically speaking. Yes, you are correct, but investing in the S&P is much riskier than investing in a diversified asset mix, including gold and silver. The Sharpe Ratio is a measure of return over risk, and it’s important because even though it may seem better to invest in the S&P with an 11% return, your time horizon has to be infinite (or at least, very long) to be confident in that return. For example, from 1971 to 2004, gold-silver-platinum was a better investment more years than the S&P was. If you invested in the early seventies with a horizon of ten years, the S&P would have been a very bad investment for you. A diversified asset mix of stocks, bonds, cash, and precious metals provides the best risk-adjusted return; at least, historically speaking.

]]> http://www.smartmoneydaily.com/investing/want-to-increase-your-profits-and-lower-your-risk-at-the-same-time-think-precious-metals.aspx/comment-page-1#comment-467 Silver Monthly Sat, 11 Aug 2007 19:39:57 +0000 http://www.smartmoneydaily.com/investing/want-to-increase-your-profits-and-lower-your-risk-at-the-same-time-think-precious-metals.aspx#comment-467 "expected return was boosted to 9%" isn't that lower than the average return of the S&P 500? I think the S&P 500 gets an average return of 11%. “expected return was boosted to 9%” isn’t that lower than the average return of the S&P 500? I think the S&P 500 gets an average return of 11%.

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