Does Warren Buffett invest in gold or silver?
Warren Buffett does not invest in gold. He has invested almost $1 billion in silver, so the reason for his aversion is not simply a dislike for precious metals. The explanation for Buffett's dislike of gold and for his enthusiasm about silver stems from his basic value investing principles.
Bottom line. Both silver and gold can function as safe haven assets, but gold tends to have a better track record over long periods of time.
I'd stop investing in gold and silver completely. I don't put money in precious metals at all, because they have a lousy long-term track record. — Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover.
Key Points. Warren Buffett made his fortune by investing in individual companies with great long-term advantages. But his top recommendation for anyone is to buy a simple index fund. Buffett's recommendation underscores the importance of diversification.
Buffett, the venerable chairman and CEO of Berkshire Hathaway Inc., has long been critical of gold as an investment option. He views gold as an unproductive asset, highlighting its inability to generate income or compound in value over time.
For Buffett, value relates back to usefulness, and without a specific use gold has neither. Interestingly, the same thought process does not apply to silver — Buffett has put money into silver before, and believes its dual nature as both a precious and an industrial metal make it useful and therefore valuable.
It is much cheaper
Arguably the most obvious reason to buy silver rather than gold is the enormous difference in price. It is often said that silver is the 'common man's gold' and looking at their respective prices it is little surprise.
Will Silver Ever Be Worth More Than Gold? As of March 2023, one ounce of Gold costs over $1,900, while an ounce of Silver runs around $22.50. That means Silver prices would have to soar 86 times to match – let alone surpass – Gold's price supremacy.
Both silver and gold can make worthwhile additions to your portfolio. But depending on your goals and individual investment plan, gold may have some advantages over silver. Long-term growth and stability, as well as overall value and being a hedge against a recession could all be reasons to prioritize gold.
Warren Buffett has been vocal that he feels gold lacks value because it lacks usefulness. A key principle of value investing, as Buffett practices it, says you should only invest in things that serve some practical purpose.
What does Suze Orman say about investing in gold?
Orman also states that investors should put no more than 5% of their money in commodities like gold, silver, or copper. They should only invest funds that they are also willing to lose because commodities are very speculative. Speculative investments carry an extremely high level of risk.
The reason Buffett, the chairman of Berkshire Hathaway Inc. -- a holding company that owns huge stakes in such firms as Coca-Cola Co., Gillette Co. and The Washington Post Co. -- has been buying silver is that he thinks it has been cheap.
A 70/30 portfolio is an investment portfolio where 70% of investment capital is allocated to stocks and 30% to fixed-income securities, primarily bonds.
Warren Buffet's 2013 letter explains the 90/10 rule—put 90% of assets in S&P 500 index funds and the other 10% in short-term government bonds.
- Bank of America (BAC), 1.03 billion.
- Apple (AAPL), 905.6 million.
- Coca-Cola (KO), 400 million.
- Kraft Heinz (KHC), 325.6 million.
- Occidental Petroleum (OXY), 248.1 million.
- American Express (AXP), 151.6 million.
- Chevron (CVX), 126.1 million.
- Nu Holdings (NU), 107.1 million.
Gold in Rich Investors' Portfolios
It turns out the average ultra-high net worth individual (UHNWI) with a net worth over $30 million does own a little gold. They just don't own giant vaults and swim in gold like Scrooge McDuck. The average UHNWI holds about 2% of their net worth in gold.
With physical gold, you own the precious metal in the form of coins, bars, or bullion. With a physical gold ETF, you own a share of a fund that holds physical gold, but you do not own the gold directly. With commodity gold ETFs, you own a share in a fund that tracks the gold price.
It depends on what you mean by “rich.” There are ways to get rich investing in any asset, including gold. However, multiplying your money in the short term requires a high degree of risk, perfect market timing, and complex trade strategies that are often impractical for individual investors.
Many experts in the space expect silver to perform strongly in the years to come, but don't necessarily see it reaching US$100 or more, especially given the current macroeconomic conditions.
Silver could be a good option if you're considering investing a small amount of money, as it has more upside potential due to its industrial uses. On the other hand, if you plan to invest a larger sum, gold might be a better choice due to its scarcity and potential for higher gains.
What is the best metal to invest in right now?
Gold. Gold is the most well-known and investable precious metal. It's unique for its durability (it doesn't corrode), shaping capability, and ability to conduct heat and electricity. While it has some industrial uses in dentistry and electronics, it's primarily used to make jewelry or as a form of currency.
Forecasts pointing to a fourth straight yearly deficit in global supplies and a rise in demand to its second-highest level on record raise the potential for silver prices to rally, and even roughly double before the end of 2024.
In the event of a dollar collapse, silver, being a precious metal with intrinsic value, may see a rise in price due to increased demand as investors seek a hedge against inflation and financial instability. Silver's value as an investment could serve as a store of wealth in uncertain economic times.
Figure 7: Gold prices far exceed all in sustaining costs of running mines. Similarly, Metals Focus's World Silver Survey 2022 estimates silver's total cash cost of production at $3.88 per ounce, and all-in sustaining cost of silver production at $10.88 per ounce (Figure 8).
The affordability of silver makes it possible for anyone to buy small quantities regularly to build a sizeable portfolio over time. As a result, many experts recommend a precious metal portfolio that ideally consists of 75% gold and 25% silver.
