How much of your portfolio should be in precious metals?

Deciding how much gold and silver to keep in your wallet should be a personal decision. Generally speaking, investors invest between 10 and 15% of their wealth in precious metals. The part of your portfolio that you dedicate to precious metals will depend on your sensitivity to risk. In general, we advise our clients that between 5% and 15% of their portfolio be dedicated to precious metals.

The research showed that the “sweet spot” for the percentage of gold in the portfolio is 20%. In the long term, this provides the best balance between risk and reward. Limit gold investments to 5-10% of your portfolio. This generally agreed amount helps mitigate riskier investments without relying too heavily on it.

Recommendations for how much gold you should keep in your portfolio vary. Investing in gold is a great way to diversify your investment portfolio with a precious metal that has held and will continue to maintain its value for generations. Precious metals such as gold and silver are physically scarce, chemically unique and useful for industrial applications. You should not plan to withdraw your investment in gold from your portfolio for about 30 years if you decide to invest based on the potential future shortage of gold.

Hubert says that four percent “is a good starting point for determining your portfolio's default allocation to gold. For example, some people will say that the majority of their portfolio should be dedicated to gold, while others say that their investments in gold should be minimized. However, gold isn't necessarily the best commodity to invest in, so it shouldn't be at the forefront of your investment portfolio. Talk to your financial advisor about how to invest in popular gold or low-risk precious metal ETFs before you start investing in gold and precious metals.

Learn About Gold is a great source for more information on how to add gold to your investment portfolio. The easiest way to add gold to a portfolio is through an ETF called SPDR Gold Shares, commonly known by its symbol GLD.