Should I invest in more than one precious metal?

After 12 years of gains in the gold price (COMEX:GCG14), investors are now facing the true reality of unlucky number 13. Gold is set to end the year down for the first time in over decade. Having hit an all-time in September 2011, gold has failed to return to that spot. Silver (COMEX:SIG14) has had a similar experience, touching $50 in 2011 and it is currently floundering below $20.

Meanwhile there are repeated calls for 2014 to be the year for both platinum (NYMEX:PLF14) and palladium (NYMEX:PAH14), the industrial metals of the precious metals.

Which is the right metal to invest in and should you invest in more than one?

How would your portfolio perform if it included an equal measure of all four precious metals, rather than just gold or just silver, or perhaps both? We take a look below and find some interesting results.

If you had $10,000, how should you spend them? Eric Sprott has famously advised on the equal allocation of portfolios to both gold and silver. Investors appear keen to hold both, comforted by the belief that gold is more stable whilst silver offers bigger returns.

How does an equally allocated gold silver portfolio compare to a platinum palladium portfolio, allocated equally?

gold silver portfolio vs pt pd portfolio

 

Unsurprisingly the gold silver portfolio has significantly outperformed the other. Whilst both saw similar returns in the years prior to the financial crisis, they swiftly diverged in the autumn of 2008.

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