How much precious metals should be in a portfolio?
A rule of thumb is to limit gold to no more than 5 to 10% of your portfolio. Depending on your situation and risk tolerance, you may feel more comfortable with a larger or smaller percentage of gold in your portfolio. The portion of your portfolio that you dedicate to precious metals depends on your risk sensitivity. We generally recommend that our clients dedicate 5 to 15% of their portfolio to precious metals.
The specific amount of your portfolio that should be used for precious metals depends on your circumstances. Some people may do well with up to 20% of their investments in precious metals, but others may do better with just 1%. The investigation revealed that the “sweet spot” for the gold share in the portfolio is 20%. In the long term, this offers the best balance between risk and return.
Peter Schiff has always recommended holding 10-20% of an investment portfolio in physical precious metals. But how much of that percentage should be in gold and how much in silver? Of course, this list is by no means all-inclusive, and there are also other considerations that must be taken into account. In terms of recommendations from financial professionals, we've seen figures ranging from 1 to 20 percent everywhere.
Where you can fall within this spectrum depends on a number of factors. From an investment theory perspective, precious metals also offer little or negative correlation with other asset classes such as stocks and bonds. This means that even a small percentage of precious metals in a portfolio reduces both volatility and risk. However, many so-called “experts” recommend investing in stocks that invest 30-40% in precious metals.
In general, 10-20% of them should be in gold and silver, respectively, although that's up to you. This allocation can also become a bit more confusing when looking at platinum, palladium, and other metals. Talk to your financial advisor about investing in popular low-risk gold or precious metal ETFs before investing in gold and precious metals. The easiest way to add gold to a portfolio is with an ETF called SPDR Gold Shares, which is commonly known under the symbol GLD.