Silver and gold have been on the rise lately, but silver is way undervalued compared to gold and will be the trade of the decade, says portfolio manager and author John Stephenson.
Gold is trading at a price 38 times more than silver, and given basic laws of supply and demand, that price gap should be narrower, Stephenson tells CNBC.
"It basically has the same physical characteristics of gold as a store of value and it also has an industrial kicker," Stephenson says.
"For my money, the trade of the decade will be in silver. Gold was the best investment over the last decade, but in the future, silver will be the go-to investment for investors looking to ride out the current storms in the global economy."
Historically, gold sells for about 30 times the price of silver, and since gold is at 38 times, silver is undervalued by about 27 percent and should be closer to $47 an ounce instead of $37.
Like gold, silver can be used as a hedge against inflation.
It also has many industrial uses, which will increase demand even further as the global economy improves.
In fact, industrial demand for silver should rise by 36 percent by 2015, the Silver Institute says in a report
"The report demonstrates how buoyant silver industrial demand is, not only because of the lack of substitution, but also because of the wide range of established and growing new uses that make up industrial demand," says Silver Institute executive director Michael DiRienzo, according to Business News Americas.
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