Ultimately, it is up to the individual investor how to distribute their precious metal holdings. That said, many so-called “experts” recommend investing in stocks, with an investment of 30 to 40% in precious metals. It is generally said that between 10 and 20% of that amount should be in gold and silver each, although that depends on you. This assignment may be a little more confusing if platinum, palladium and other metals are also considered.
Precious metals don't pay dividends: physically owning gold and silver or other precious metals doesn't provide an opportunity to earn dividend income. This is a very common debate regarding these investments, as investments in dividend-paying stocks can offer investors an opportunity to accelerate portfolio growth. Some analysts recommend allocating between five and ten percent of your 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 needs. The assignment will be different for each individual. To help you decide how much gold and silver you'd like to consider owning, we've compiled information from all over the country. 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. As a result, many experts recommend a precious metals portfolio that ideally consists of 75% gold and 25% silver. This is because the price of silver tends to be more volatile than that of gold and will therefore have a greater impact on the value of your precious metals portfolio as its price fluctuates. It may be a better financial decision to expose yourself to gold through the funds and stocks of gold companies.
Investors treat gold more like a currency than silver, a metal that has many more industrial uses than gold. Some of the most popular precious metal ETFs include SPDR Gold Trust (GLD), iShares Gold Trust (IAU), and iShares Silver Trust (SLV). Sure, there are times when gold's gains will exceed those of silver, but for the most part, low volatility and slow gold prices translate into lower returns. This chapter will look at the important considerations that any gold buyer or investor should have to help you determine how much gold and silver you should buy.
While vaults like this exist, gold bars are much more accessible than the average gold owner can imagine. Therefore, when the ratio is higher and investors believe that it will fall along with the price of gold compared to silver, they can decide to buy silver and take a short position on the same amount of gold.