Brad Tinnon

Brad Tinnon

Have You Seen The Recent Silver Commercials?

If you’ve watched any silver commercials lately you would think that silver is a “can’t miss” asset and something that you should definitely own. I recently saw a silver commercial from Lear Capital and noticed that it is significantly flawed and preys on the uninformed. In today’s blog post, I will point out two major fallacies of this commercial and why you should be cautious when taking advice from sources such as this.

FALLACY #1: SILVER HAS OUTPERFORMED U.S. STOCKS THIS YEAR

The commercial last aired on 11/9/17 and it was mentioned that silver has outperformed stocks this year.

This is manipulation and deception at its best!!!

Let me explain. The commercial was produced in early 2017 and reflected performance numbers from 1/1/17 thru 4/4/17 (a mere 3 months). During this time, silver had in fact outperformed the U.S. Stock Market (S&P 500). Silver had a 12% return while the stock market had a return of around 5.5%. In other words, silver more than doubled the return of U.S. Stocks during the first quarter of 2017.

However, keep in mind that this commercial recently aired on 11/9/17, a full 7 months after the performance period listed above. What’s deceptive about this is that the commercial implies that silver is still going strong and outperforming U.S. Stocks, but that is not the case. 

While silver did well during the first three months of the year, it hasn’t done so well since that point. During the second quarter of the year, silver declined almost 9% and during the third quarter it was basically flat. And when you look at the performance of silver year to date, you will see that it has grossly underperformed the U.S. Stock Market. In fact, the U.S. Stock market has more than tripled the performance of silver this year, but you would not know that by watching the commercial.

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Not only is this manipulative and deceptive but it is also inappropriate for anyone to tout short term performance as a reason to buy an investment. After all, a 3 month time frame is hardly enough time to evaluate an investment. Additionally, we can never forget that commercials are designed to get you to buy something. And their interests are not always aligned with yours. This brings me to my next point. 

FALLACY #2: NOW IS THE TIME TO BUY SILVER

In the commercial, there are quotes such as:

“Financial experts and investment banks are hoarding silver.” 

“Silver is going to $200 / ounce.”

“Experts say silver could sky rocket 50% this year.”

Even Robert Kiyosaki, author of Rich Dad, Poor Dad endorses silver in a different Lear Capital commercial. You think that he didn’t get paid to make a guest appearance?

These companies will use anything from celebrities and “expert” quotes to get you to buy their product. 

But think about this for a second. This is really important, so pay close attention!!!

Why in the world would a company be selling you silver if they are talking about how much it is expected to go up in the future??? It just doesn’t make any sense. If they truly believed what they said, then they would be buying silver and hoarding it for themselves, not selling it.

This is hypocrisy at its best!!!

Always remember that television ads are ultimately designed to sell you a product, not to do what’s in your best interest. And in many cases these ads are half truths which are manipulative and deceptive. Hopefully now you are more informed and can look at these types commercials with a cautious eye! 

Feel free to share any questions, comments, or experiences you have below. 

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Brad E.S. Tinnon
CERTIFIED FINANCIAL PLANNER™
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