During the most recent financial and economic debacle caused by the collapse in the sub prime housing market, many investors flocked to safer investments such as bonds as well as precious metals such as silver and gold including gold and silver bars. As the news of the inevitably of a financial crisis exploded in 2008, the price of silver took off from $10 per ounce to dizzying heights of almost $50 per ounce. An investor who has invested in silver before the crisis who have made a handsome profit 50 times over in a few years.
While investors in stocks and shares experienced the lowest moments of despair as some of them see their entire investments lose their value, other investors have a reason to smile as their investments in precious metals such as gold and silver as well as commodities gave historically high returns. Therefore in any moment of time, whether it is during an economic boom or in a financial or housing collapse, there are still investments that give good and healthy returns. But are there any investments that can weather through all investment climates? What are the best forms of investments? Are precious metals dependable as safe havens for investments during a crisis?
Investment analysts and experts have had their say about what is the best investment and what stock offers the best performance. There are so many reports, analysis and news about stocks investments and corporate performance, there is certainly no lack of opinions and views on how the investment climate is faring or what direction the stock market or commodities market is going. Whether you are planning to invest in stocks or shares, exchange-traded funds, bonds, commodities, options, derivatives, futures or precious metals, you can find all kinds of advice and recommendations from experts in their individual specialty. Most, if not all of the time, the report or recommendation will come with a footnote that says something like this – the previous performance of the fund or stock does not indicate its future performance. Hence, it is a warning that a well-performing investment may not necessarily stay that way all the time.
Take for example, oil and natural gas. The price of oil and natural gas was over $100 per barrel a few years ago. It is now trading slightly below that. There are conflicting views whether the price of oil will stay at this level or move upwards or adjust downwards. Most people by now would have forgotten that more than twenty years ago and in the 1970s, oil was trading at only a tenth of its current price. The oil industry was in the doldrums. Companies that are involved in the oil industry including oil riggers and their suppliers and contractors went bust. No one even wanted to look at an oil well because the cost of drilling was not worth the price of the oil.
The lesson we can learn from this is that the economy experiences a cyclical existence. Whatever we invest in is bound to benefit from a boom or suffer during a bust. There is no guarantee in any investment. But different types of investment perform well during a bust while others may not.