Chart of the Week: Would you Rather Invest in Sochi Olympic Gold, Silver, or Bronze?

We can’t get enough of the Olympics, and why they weren’t contested in the remote Hoth system (we joke, we joke). In honor of the 22nd annual Winter Olympic Games in Sochi Russia, we decided to have our chart of the week take a look at the precious metals that millions of little kids dream about biting when they grow up.

Sochi Olympics

We know the metal hierarchy in the Olympics is all about Gold, then Silver, then Bronze (Copper) – and indeed that matches up with the worth of each of those metals and the medal itself, per Saving Advice.

Olympic Metals Value
(Disclaimer: Past performance is not necessarily indicative of future results)
(Disclaimer: Since Copper is main metal in Bronze, we’re exchanging the two)
Price Data courtesy:  Price Oz

But what if we’re talking not just about the value of the medal/metal, but the value of investing in the metal. We all know which are more expensive, but which have gained more as an investment? We stumbled upon a thorough article discussing just that from the Indexologyblog.

“To any Olympic athlete, gold is the goal; however, that may not be the case for an investor. Let’s take a look at the statistics to see how the metals stack up.  Below is a cumulative return chart of gold, silver and copper. Notice over the period that gold has the highest performance with a total of 593% followed by copper and then silver, gaining 452% and 283%.”

Gold Silver Broze compare(Disclaimer: Past performance is not necessarily indicative of future results)
Chart Courtesy: IndexologyBlog

It turns out that Gold is still the top precious medal when it comes to returns…  while Copper seems to show a higher return over silver. But returns are just one factor. In context of the Olympics, what are the athletes risking to get the medal? It’s safe to assume that the athlete that has the best time on a run, lands the best trick triple axle in figure skating, or pulling off a snowboarding move otherwise never attempted before will get you the gold (the highest return). But on the investing side, is taking the biggest risk to get the biggest reward the best strategy? In sync with our passion for risk management, the article does a great job discussing the risk of the three medals in the world of investing.

“However, few look at returns without considering risk.  Over the time frame, risk as measured by annualized volatility was 47.6% for silver, 27.3% for gold and 26.3% for copper. Although silver had both the highest volatility and lowest cumulative return, it had the highest average monthly return, up 112 basis points. This is compared with only 73 bps for gold and 68 bps for copper in an average month. Further, in the average up month, silver had the highest gain of 8.9% versus only 6.0% for copper and 5.2% for gold. One might conclude taking the highest risk can pay off but looking at the downside counts as well. The reason gold had the highest cumulative return was since the average loss in a down month of -3.7% was smaller than for either copper’s or silver’s average monthly loss of -5.0% and -6.6%, respectively.”

While Bronze might not be the most precious, precious metal in the Olympic games, when it comes to investments, Bronze (Copper) offers a lower downside/higher return than Silver, and Gold could be argued as the best overall metal {past performance is not necessarily indicative of future results). As for the Olympics themselves, we’ll be rooting for as many Golds for the U.S. as possible.

P.S — If you’re interested in the Gold commodity conversation, here’s our previous commentary.

  1. The Surprising Connection That The Worst Performing ETF’s Share
  2. Goldfinger, Gold iPhone, and Gold Backwardation!
  3. Who’s Meddling with Metals?
  4. You Think Gold’s been doing Bad, Check out Gold Miners…
  5. Gundlach’s Next Call – Short Gold
  6. RAID for the Gold Bugs
  7. Gold Forming Classic “Frowny Face” Pattern
  8. Smiling While Gold Sinks
  9. Kicking Gold While It’s Down
  10. Platinum Outshining Gold in the New Year
  11. Coinage Takes a Well-Deserved Nosedive
  12. Gold and Stocks Decoupling?
  13. The Best Way to Lose Money on Gold

 

 

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Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, RCM's own estimates of performance based on account managed by advisors on its books, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

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Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, RCM's own estimates of performance based on account managed by advisors on its books, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.