08-04-2021, 10:08 AM
Is precious metal swapping an effective investment strategy ?
<!-- SC_OFF --><div class="md"><p>So I just watched a video on an interesting investing strategy called precious metal swapping where the idea is you look at long term charts of the ratios of the five precious metals (gold, silver, platinum, palladium, and rhodium) compared to each other, and buy when the ratios are historically cheap then sell when they're historically overvalued (and then use those gains to buy another precious metal that's historically cheap). </p> <p>The video, <a href="https://www.youtube.com/watch?v=zOPMngisOEM&t=578s&ab_channel=FindingValueFinance">https://www.youtube.com/watch?v=zOPMngisOEM&t=578s&ab_channel=FindingValueFinance</a>, outlines a scenario where if you had started in 2000 and traded based off the ratios for the next 20 years, you would've made a 38.6% annualized return. This figure is skewed a bit high due to him not taking premiums when buying/selling precious metals into account, but surely the return would still be much higher than the S&P 500, right?</p> <p>I'm intrigued because it seems like a relatively low risk, high reward strategy, but it sounds too good to be true which is why I'm here asking people who are smarter than me about it. Thoughts?</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/mphysics"> /u/mphysics </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/oxfpr1/is_precious_metal_swapping_an_effective/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/oxfpr1/is_precious_metal_swapping_an_effective/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><p>So I just watched a video on an interesting investing strategy called precious metal swapping where the idea is you look at long term charts of the ratios of the five precious metals (gold, silver, platinum, palladium, and rhodium) compared to each other, and buy when the ratios are historically cheap then sell when they're historically overvalued (and then use those gains to buy another precious metal that's historically cheap). </p> <p>The video, <a href="https://www.youtube.com/watch?v=zOPMngisOEM&t=578s&ab_channel=FindingValueFinance">https://www.youtube.com/watch?v=zOPMngisOEM&t=578s&ab_channel=FindingValueFinance</a>, outlines a scenario where if you had started in 2000 and traded based off the ratios for the next 20 years, you would've made a 38.6% annualized return. This figure is skewed a bit high due to him not taking premiums when buying/selling precious metals into account, but surely the return would still be much higher than the S&P 500, right?</p> <p>I'm intrigued because it seems like a relatively low risk, high reward strategy, but it sounds too good to be true which is why I'm here asking people who are smarter than me about it. Thoughts?</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/mphysics"> /u/mphysics </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/oxfpr1/is_precious_metal_swapping_an_effective/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/oxfpr1/is_precious_metal_swapping_an_effective/">[comments]</a></span>Kind Regards R