How much of your portfolio should be allocated to gold?

This is why investors prefer to add gold to their portfolio to protect themselves from inflation. Most estimates suggest that investments in gold should account for only 5-10% of your portfolio and no more. This will ensure that your portfolio has room for other investments such as mutual funds, stocks, P2P lending, etc. Many experts will tell you that you should keep your investment in gold limited to between 10% and 15% of your total portfolio.

But this may not make any more sense to you because we all have specific goals that they are trying to achieve. 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.

We generally advise our clients that between 5% and 15% of their portfolio be dedicated to precious metals. Most asset managers' gold allocation recommendations appear to require an allocation of 2 to 6% in a diversified portfolio. Is that amount going to have a significant impact on your portfolio in one way or another? If you want to own enough to make a difference in your portfolio returns, you need to ask yourself if it's really worth the potential opportunity cost of not owning assets that produce income and cash flow. While allocating about 10 to 15 percent of a person's total investment portfolio to gold is a good practice as a safeguard against economic recessions.

The easiest way to add gold to a wallet is through an ETF called SPDR Gold Shares, commonly known by its symbol GLD. When investing in gold, one must make sure to weigh your investment in gold against all the other assets in your portfolio and not just with stocks. In this case, I only recommend investing 5 to 10% of your total portfolio in gold securities and other gold-related investments, including a gold IRA. Designing a strong investment portfolio involves designing a diversified set of investments and securities that you prefer.

If you fall into this category of investors and consider that investing in today's economy has a moderate to high risk, you may want to allocate a slightly larger share of your portfolio to gold and gold-related securities. A good investment portfolio has securities based on your investment preferences, diversified and designed to generate maximum returns with minimal risks. If this is your case, you should invest 30-50% of your total portfolio in gold-related assets and earn even greater rewards should something extremely negative happen. Investors who think the economy is going in the wrong direction should spend more of their total portfolio on investments related to gold and gold.

While many experts believe that investors should limit about 10 to 15 percent of their investment portfolio to investments in gold, there are many factors to consider before making the decision. Ashraf Rizvi, founder and CEO of Digital Swiss Gold and Gilded, says: “For those lucky enough to manage a larger portfolio, investing in gold is subjective to investors' risk appetite and asset mix, not just purchasing power. If you feel like many other investors, it would be wise to consider allocating an even larger share of your global portfolio to gold securities and other gold-related investments such as bars, coins and rounds within an IRA account. While this may help during market downturns, it's important to make sure you reallocate your gold investments each year and eliminate profits from the table.

If you are the type of investor who is relatively confident in the country's economic growth but wants to have some kind of insurance against incidentals that cause a recession, then you can allocate between 5 and 10% of your portfolio to investments in gold and gold-related securities. .

Hattie Bonser
Hattie Bonser

Passionate bacon enthusiast. Infuriatingly humble internet evangelist. Passionate coffee evangelist. Passionate food scholar. Freelance troublemaker. General food fan.