Deciding how much gold and silver to keep in your portfolio should be a personal decision. In general terms, investors invest between 10 and 15% of their assets in precious metals. How much of your portfolio you dedicate to precious metals will depend on your risk sensitivity. In general, we advise our clients to dedicate between 5% and 15% of their portfolio to precious metals.
Gold brings a special element to a wallet, which differentiates it from all other metals. However, Cramer warned that this metal should not represent even 20 percent of an investor's portfolio. Rather than suffering these significant declines, holding gold could reduce these declines considerably. Investing in precious metal ETFs can provide much-needed cash flows in times of recession and market slowdown.
In addition, gold and silver are strategic long-term holds that can preserve your assets if your company has to close its doors. Of course, this may seem like a bad idea, as gold hasn't done anything spectacular in a few years. Some investors who are really concerned about the financial system have between 60 and 100% in gold, along with some silver. This means that its price can surpass gold in a bull market, but also fall more strongly in bear markets.
Von Greyerz, recognized as one of the world's leading experts on gold investments, believes that the situation is much worse today. Therefore, investors who own gold or silver ETFs do not retain full ownership of their investment and cannot use their ingots or coins as money in the event of an economic collapse or disaster. An asset allocation that is too large (15% or more) dedicated to precious metals could result in the loss of the higher returns offered by other asset classes. He says: “Many investors are wondering what percentage of their financial assets should be in precious metals.
Be careful when buying gold or precious metal ingots, and be sure to buy only ingots or coins that include the manufacturer's name, as well as their weight and degree of purity. Throughout history, in every country where there has been a serious financial crisis, gold and silver have always served as currency. The easiest way to add gold to a portfolio is through an ETF called SPDR Gold Shares, commonly known by its symbol GLD. Whether you invest in bullion, coins, or exchange-traded funds (ETFs) backed by precious metals, exposure to gold and silver protects your wealth when the value of the dollar declines.
Baur and Lucey (20) provided the first statistical test of when gold acts as a safe haven and when as a hedge. So in this case, maybe you should have a higher percentage of gold? Because of the liquidity of gold compared to the illiquid nature of real estate. Talk to your financial advisor about the possibility of investing in popular gold or low-risk precious metals ETFs before you start investing in gold and precious metals.
