How Much of My Portfolio Should Be in Gold and Silver?
Gold and silver should represent an investment into your portfolio as insurance against global economic collapse and geopolitical unrest. However, setting an exact percentage can be challenging.
To assist with determining an ideal percentage, consult a financial advisor. SmartAsset offers a free tool that matches you up with qualified advisors in your area.
1. 10% of your wealth
As a general guideline, we suggest investors allocate 10-15% of their wealth towards gold and silver investments as an effective diversifier. Given their unique properties and diversification advantages, these precious metals should make up part of an investment portfolio’s allocation strategy.
Gold has long been considered an attractive asset in times of economic uncertainty because its low correlation to stocks and other assets makes it a solid diversifier. Furthermore, historical negative correlation between US dollars and other currencies also gives gold its advantage as an investment choice.
Gold can be an attractive investment option; however, as with any asset class it could be affected by financial crises. Therefore it’s wise to diversify by diversifying with other assets like stocks and bonds as well.
2. 5% of your wealth
Many financial experts advise investing 5% of your wealth in gold and silver as a safeguard against currency devaluation, economic volatility and geopolitical risk. This recommendation often serves as an insurance against currency depreciation, economic turmoil and geopolitical threats.
Though this percentage may seem low to some investors, its relevance will depend on your specific circumstances. When making this decision, take into account your savings goals, portfolio structure and whether precious metals align with your investment strategy.
Kevin O’Leary of ABC’s Shark Tank typically allots about five percent of his assets to gold bullion or ETFs; others, like hedge fund billionaire Ray Dalio of hedge fund billionaire fame, suggest allocating more. It is important to remember that silver tends to experience greater price swings than gold; therefore it would be wiser to allocate your precious metals portfolio with 75 percent gold and 25 percent silver to reduce price variations and avoid dramatic price swings.
3. 10% of your wealth
The 10% rule is often quoted by investors looking to add precious metals as a hedge against inflation, however exceeding this percentage may hinder your strategy and under-indexing other asset classes could limit returns in other asset classes.
Under economic stress, investors often shift away from less liquid debt-based assets towards more tangible physical assets such as gold and silver. It is not unusual for the gold/silver ratio to rise beyond 50-to-1 or even peak at 100-to-1 during such times.
Always ensure your gold and silver holdings are stored safely so they maintain their value over time. While individuals may opt to store physical bullion themselves at home or in a safe deposit box, Augusta Precious Metals provides a streamlined process with dedicated Gold IRA professionals for safe storage solutions.
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Valuations of any valuables you own such as jewelry, gems and precious metals; total balances in retirement accounts such as IRAs, 401(k) savings plans, SEP IRAs and variable annuities.
Tithing is an offering you give as part of your religious practice and tradition, often Christians and Jews alike. Although tithing is not required by law, it is strongly advised as part of your financial plan.
Equities are investments subject to market volatility while bonds provide a safer alternative. Conventional wisdom suggests that as you near retirement, shifting more of your savings into bonds should help reduce exposure to risk; however, each investor needs to find their optimal asset allocation mix by consulting a financial professional or visiting their fund prospectus or summary prospectus for more details.
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