Silver as an Investment: What 12 Years Taught Me About Returns and Timing

Silver has surged sharply over the past two years, reigniting interest among investors looking beyond equities and gold.

But long-term returns from silver tell a very different story from recent price moves.

In the comic books I read as a child, the masked Lone Ranger would signal his arrival in a town in the troubled Wild West to bring justice to the weak against bullies with a "Hi-Yo, Silver!."

The chiwda and banana chips added a nice Indian flavour to the excitement of reading the Lone Ranger comics. Every "Hi-Yo, Silver!" led to a gulp of sherbet followed by a mouthful of chiwda. And when the deed was done, the last frame was the Lone Ranger riding into the sunset with a triumphant "Hi-Yo, Silver! Away!"

Silver Investment Returns: 2013-2025

But unlike the Lone Ranger, I had no such illusions of saving anyone who was in trouble when I bought silver bars at Rs 55,000 per kg.

I invested in silver with a selfish view to prevent a portion of my savings from being worthless in a troubled world.

Now, at the indicative prices of Rs 243,000 per kg I have liquidated my silver.

That, in itself, was a process. I took the silver to a recommended location in Mumbai's famed Zaveri Bazaar. The drive in typical last-kilometer traffic took me one hour.

I showed the buyer what I had to sell. I was then directed to take my silver to be weighed at another location, a 10 minute walk dodging handcarts, bicycles, motorbikes, cars, the occasional stray dog and piles of mud and sewage.

The verification of the weight was confirmed on a scrawled, handwritten sheet. Back in reverse through the same dusty path to the first spot to show the buyer the weight.

Then the price per kilogram. Then the multiplication of price x weight to get a total rupee value. Then a KYC with the PAN card, the driving license, the cancelled bank cheque.

And then the sale. Believe me, I am convinced I did the best thing by investing in Quantum's Gold Fund and not trying to purchase gold coins!

The price I paid for the silver was approximately Rs 55,000 per kg. At a selling price of Rs 243,000 per kg my profit is Rs 188,000 per kg.

This equates to a profit of 342% on my investment. Even after paying what is due as a tax on the capital gains to Attai, it is still a neat profit.

But wait!

How Silver Compared with Gold and Equities

Before you ask me to proclaim the symbolic "Hi-Yo, Silver - Away!" as a triumphant clarion call of victory, kindly note one important fact: My investment in silver was in April 2013.

No typo there. Twelve years and eight months ago. A holding period of 152 months.

That impressive return of 342% over 152 months works out to a more modest 11.5% compounded annualised growth rate (CAGR) over this time period.

If I had invested that capital in gold, my return would have been approximately 13.4% CAGR and if I had invested in the BSE-30 Index, my return would have been approximately 14.5% CAGR - before transactions costs, expenses, and taxes.

Why My Silver Investment Thesis Was Wrong

Overall, my investment in silver in April 2013 was a poor investment decision. It had a decent investment outcome - but not for the reasons I invested in silver.

From 2013 when I purchased silver until 2020, I was under water. My purchase price was higher than the prevailing market price. The rebound after Covid gave silver a burst of energy and then it stayed in another lethargic price range until 2024.

So, 11 years after my investment in silver, I stopped losing money on the initial investment and was finally in the green.

Since 2024 the price of silver has taken off and is in a hyperbolic curve the past few months of 2025. The Lone Ranger, despite his mastery of horseback riding, would have had an impossible time to stay perched in his saddle on that spectacular, steep surge in 2025.

What Drove the Recent Silver Rally

Why was there this sudden surge in silver prices? Why this maniacal buying interest?

The surge in prices is apparently due to the actual and perceived demand for silver from all things related to computing, data centres, and EVs.

The fact that silver is used in industrial activities is well known. Now, it has been revealed that silver is used in the vital elements of the new-age economy.

What Investors Should Learn from This

Making money on an investment is one thing, but the reasons it made (or lost) me money are important to understand.

A gambler rolls the dice and lives to roll the dice another day - until the gambler has destroyed all his capital. An investor dissects the rationale of each investment made and measures the outcome against the expectation.

Let me try to break down the 'rational reasons' for my investment in silver.

Silver is often described as "half copper, half gold." As I noted above, silver has industrial uses plus it has the added advantage of possessing the shiny glint of a precious metal.

While the world economy was mostly recovering during my initial purchase month of April 2013 (though in a low growth range), silver did not show the characteristics of being a proxy for industrial and economic activity right until early 2024.

Silver hardly had a heartbeat for the first 11 years that I owned it. In hindsight, it would have made more sense to have been invested in equities to capture the returns from economic growth.

To make things worse, during the same time period of 2013 to 2024, silver did not do anything as a precious metal, either. Gold did far better.

In summary, my thesis for investing in silver was proved incorrect because neither did silver function as "half copper" nor did it function as "half gold."

My punt on silver in 1979

Back in 1979, when I was nineteen years old, I had taken a small punt in silver.

The Hunt brothers of Texas, US, had cornered the silver market and silver surged to then new highs from US$ 9 per troy ounce in August 1979 to US$ 50 in January 1980.

The exports of silver from India were banned at that time and Inda was short of foreign exchange. There was a surge of requests to allow Indians to export their silver to the US.

This would allow the RBI to get dollars for the country and allow us to convert our dull khandani silver moulded in thalis, katoris and trays into spectacular profits.

In anticipation of that export waiver, I bought 1 kg of silver for, if I recall correctly, Rs 2,800 and then sold it one month later for Rs 4,200. My thesis was that the government would allow us to export silver.

It did and I sold my silver.

For the record, silver surged nearly 3x more than after I sold it. And, for another fact to remember, the price of silver collapsed to less than US$ 15 per troy ounce by the end of 1980 and did not touch US$ 50 per troy ounce until October 2025.

Not every "Hi-Yo, Silver" ends with an "Away."

Is Silver now a New Age Economic ingredient?

The current thesis for silver is based on the potential increase in demand from the new-age industries of AI and EV related demand - the "copper for the new age of industrial revolution."

That was not my thesis when invested in silver in April 2013. I did not invest in silver with an insight that a change in industrial use and demand pattern would make the price of silver surge. There is clearly an evolution in what is defined as 'industrial demand.'

As we can see from the goods we use in our daily lives, entire industries from transportation to computing are undergoing a seismic shift. We are in a New Age Economy version 2025.

When a 'new, new, thing' captures the imagination of investors, speculative forces emerge in the belief that the 'new, new thing' can lead to unimaginable and quick wealth.

The herd can conjugate scenarios which can lead to rational-sounding expectations of irrational outcomes based on derived demand-supply equations.

If I had been smart enough to predict the birth of AI or EV in April 2013, I would have invested in publicly available and listed stocks in those sectors directly.

Owning Tesla (30x) would have been fun - or even TSMC (18x). Silver's 4x surge over that same time period is a boring and late stage play on the new, brave world.

If I had split my investment in silver in April 2013 into a 50% allocation to equities in the BSE 30 Index (I think indices are a poor way to invest, but that is a topic for another discussion) and a 50% allocation to gold, I would have had a higher CAGR of approximately 2% over that same 152 month time period.

My thesis of buying silver was not as a proxy for AI computing and EV.

This does not mean that silver will stop its rise, it may increase. But note that silver is not a recent technology, it is used in recent technologies.

Knowing the history of technology evolution - and as has happened many times before - is it possible that substitute elements and materials will replace what silver currently does in the recent technology chain at far lower prices and far higher productivity?

Moore's Law - the most fundamental law of computing technology - proposed that the number of transistors in a microchip would double every two years (implying that processing power would double) thereby costs of processing would decline by 50%.

Gordon Moore, the founder of Intel, lived to see his Law prove right and even had the pleasure of extending its end date, when it would no longer be valid.

Chips got smaller than Moore had initially imagined and now have reached a physical limit. Scientists cannot add more components in a transistor anymore without disrupting reliability and performance.

So, Moore's Law is dead. But we still use its benefit.

What took a computer at TIFR, Mumbai (Bombay) an hour to process with punch cards is now easily computed by us on our mobile phone in seconds - and at a fraction of the cost.

In the world of disk storage there was Kryder's Law - from the founder of Seagate, Mark Kryder - which stated that disk density would double every 13 months.

The density (and, hence, storage capacity) increased by 50 million times over 40 years. Now the Law is dead as disk density has reached a physical limit.

We are now apparently in an era of Neven's Law - from Google's Director of Quantum Computing, Hartmut Neven - where there is a belief quantum computing ensures that one can compute the same data at a far lower amount of computing power (and, hence, cost) and a benefit of 'double-exponential.'

If processing power due to computing doubles in one year, the cost will be 1/4th. The next double in processing power will see costs decrease by 1/16^th...and so on.

Before you jump to any conclusions on my mastery of physics and computing science, let me confess something. I loved physics and named my company after the Quantum Theory and Planck's Constant.

But I stopped studying physics after the 12^th standard and switched to a Bachelor of Arts in Economics and Jai Hind College, Bombay University.

So, I cannot tell you anything wildly or remotely accurate about technological changes and revolutions in the next few years.

Having made that confession, decades of experience in financial markets have taught me some lessons...

Use common sense in investing

With common sense and knowledge of the history of innovation in science as well as bubbles in financial markets, one could assume the geniuses who run scientific research labs are more trustworthy than the talking heads who work in financial service firms and write reports on why silver is the new copper, or why bitcoin is the new reserve currency, or why tulips are worth more than the house you live in.

I would expect researchers and scientists, with all the power of science at their disposal, to produce products in the computing, technology, EV world that need less silver per output over time. Or even replace silver with something different.

Wireless signals replaced copper wires that transmitted our telephonic messages.

PVC replaced copper pipes for transporting liquids like water.

Recycled plastic bottles replaced glass bottles for storing liquids and medicines.

The tyres in our cars went from punctured throw-aways to puncture-less tyres.

Our roads went from potholed nightmares to - oops, not yet....

You get the gist. Something could happen.

I do not have a view on changes in technology, and I have no insights on eventual winners, but I know why I bought silver (copper + precious metal) and now silver is priced for the new age revolution (computing, data centres + EV).

I wished to own something which is linked to industrial growth and precious metal.

The Spanish empire is long gone, and silver is no longer its currency.

The Lone Ranger still rides silver, but the metal is now riding on something else.

Something I do not understand.

Keep it simple, solid

My personal investment portfolio is simple and follows the theme of retaining 12-24 times my monthly expenses in liquid funds. The balance of my savings are invested 20% in gold + 80% in equity.

The 12/20/80 model is what we built at Quantum Mutual Fund for you to amend as you see fit. It is simple to understand and implement because the 'baaraa, beess, assi' model deliberately allocate to three asset classes via a liquid fund, a gold fund, and a select few equity mutual funds.

Since I am accountable to me, myself, and I, I recognize that my thesis for investing in silver turned out to be a poor decision with a so-so outcome.

But, what if I had bought silver in April 2024? Would it have been a different story?

My investment would have had the same outlandish return in a shorter time span of 20 months (and not 152 months). The CAGR would have been astronomical - far outstripping that of the direct plays on EV and AI stocks in the past twelve months.

Had I bought silver in April 2024 (and not in April 2013) on my original thesis of 'copper + precious metal', would I have still sold it twenty months later in December 2025?

Yes, I probably would have.

It is not that I am unhappy with a stupendous profit in a brief period of time - not at all.

But the question is whether I made the profit for the reason I was supposed to - or was I just lucky? The luck of being in the right place at the right time?

I never linked silver to the craze of computing power and EV. The market has. Good for me and good for the market. We both got what we want. I have my return and those carrying on the silver trade have their beliefs.

I will settle back to the couch, eat my chiwda, banana chips, cashew nuts (one is older now and healthier snacks required to balance the diet!) and drink my limbu paani and wait for my sales proceeds to clear.

Then I will allocate my sales proceeds to a select basket of Quantum Mutual Funds to implement my long-standing investment objective:

(i) Safety of the liquid fund.

(ii) Gold as a hedge to protect against politicians who win elections by promising handouts at the cost of fiscal responsibility.

(iii) Equity funds that can help me compound my investments in a methodical and sensible way, without buying companies run by suspect CEOs and/or owned by pirate promoters.

"Hi-Yo, Silver! Away!"

PS: This article was originally published on 30 December 2025 and has been updated with a new title.

Disclaimer: The Long View is authored by Ajit Dayal. Ajit is Founder of Quantum Advisors Pvt. Ltd. which is the Sponsor of Quantum Asset Management Company Pvt. Ltd - the Investment Manager of the Quantum Mutual Funds. Ajit is also the Founder of Quantum Information Services (QIS) which owns Equitymaster and PersonalFN. The views mentioned herein are that of the author only and not of Quantum Advisors, Quantum AMC or QIS. The information provided herein is compiled on the basis of publicly available information, internally developed data and other sources believed to be reliable by the author. The information is meant for general reading purpose only and is not meant to serve as a professional guide / investment advice for the readers. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investment. Whilst no specific action has been suggested or offered based upon the information provided herein, due care has been taken to endeavour that the facts are correct, accurate and reasonable as on date. None of the Author, Quantum Advisors, Quantum AMC, QIS, their Affiliates or Representative shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary losses or damages including lost profits arising in any way on account of any action taken basis the data / information / views provided in The Long View.