Your portfolio should be structured in a way that helps you achieve your long-term goals. However, many experts warn that you should be careful about how much gold you should include in your portfolio. A general rule of thumb is to limit gold to no more than 5% to 10% of your portfolio. Depending on your situation and your risk tolerance, you may be more comfortable with a larger or smaller share of gold in your portfolio.
The research showed that the “sweet spot” for the percentage of gold in the portfolio is 20%. In the long run, this provides the best balance between risk and reward. The part of your portfolio that you dedicate to precious metals will depend on your risk sensitivity. In general, we advise our clients that between 5% and 15% of their portfolio is dedicated to precious metals.
Some analysts recommend allocating five to ten percent of their portfolio to gold and silver. Others suggest allocating up to 25 percent. So how much gold and silver should you have? It depends on your situation and your needs. The assignment will be different for each person.
To help you decide how much gold and silver you can consider owning, we have compiled information from across the country. So it's 1% in gold and 1% in silver, at least. Talk to your financial advisor about investing in popular gold or low-risk precious metal ETFs before you start investing in gold and precious metals. Readers should probably never consider gold as a fundamental stake in their respective portfolios, as gold and complementary metals can be erratic, pay no dividends and, especially in physical form, can pose a liquidity challenge.
Buying physical gold often comes with high selling costs, and it also carries the risk of relying on the retailer to sell pure gold. Some believe that if the United States were to change to a gold standard, it would benefit from its gold reserves. If you have 5% in gold and 50% in S%26P, for example, then gold needs to rise 400% if the stock market falls by 50% just to break even (assuming gold goes up as much as stocks fall). While there are vaults like this one, gold bars are much more accessible than the gold owner can imagine.
The easiest way to add gold to a wallet is through an ETF called SPDR Gold Shares, commonly known by its symbol GLD. Therefore, investing in gold works as a good hedge against currency volatility and inflation, as rising inflation rates often cause gold prices to rise. Gold prices often move in the opposite direction to the dollar, so if the greenback weakens, gold is likely to strengthen.