No one knows what lies ahead when it comes to investing, so it is wise to diversify your assets and safeguard your purchasing power by stashing some of your money away in gold and silver investments.
Though storing bullion at home has its advantages, there can be downsides as well. Home storage is less secure than depository or bank deposits and may make hiding a stash more challenging from would-be thieves.
How much gold and silver do I need?
Gold and silver investments should be an integral component of every investor’s portfolio. Gold provides protection from inflation while providing an insurance against financial disaster, while most advisors recommend allocating 10% of one’s wealth towards gold and silver holdings.
Precious metal can be hard to gauge in terms of quantity; nobody knows exactly when or if a crisis will strike. But there are certain measures you can take in order to gauge your needs more accurately.
One approach is dollar cost averaging, which involves buying the same amount of gold or silver every month over time. Another strategy involves taking into account your expenses and how long they might require supplementing with gold before multiplying that figure with its current price to determine how many ounces would be necessary; similarly for silver as its price rises you would require fewer ounces as your needs change.
How much do I want to spend on gold and silver?
Gold and silver can add diversification to an investment portfolio by maintaining purchasing power over time and being non-correlated with stocks, bonds, or real estate investments. However, precious metals should primarily be seen as savings mechanisms; as such they should be stored away in a safe alongside hard cash savings accounts.
Some individuals prefer keeping physical bullion stored at home, however this method can quickly become complex. You should carefully consider how much space will be taken up by the bullion, its ideal storage conditions (away from damp and corrosive environments) and how to secure it. Furthermore, only one person should know where your precious metals are kept for added security from criminals and thieves. Invest in contents insurance should fire or theft occur. The easiest way to determine how much gold to purchase is calculating monthly expenses plus crisis timelines to find how long your precious metal will last during emergencies.
How much should I sell my gold and silver?
Gold and silver bullion are divisible and liquid assets, enabling you to take profits or rebalance your portfolio quickly and easily. This stands in stark contrast with assets like property or stocks which tend to be much less liquid and must be sold in large volumes only.
Bullion should also be kept at home as an effective hedge against hyper-inflation and store of value. But remembering there will never be the perfect moment to sell may make more sense than trying to time the market perfectly. Cost averaging may provide greater advantages.
When selling gold and silver, the best method is through a reliable dealer that offers secure storage services where your bullion will remain fully segregated from other customers and safe. This helps reduce transaction costs and maximizes returns.
How much should I invest in gold and silver?
Answering this question entirely depends on your unique circumstances; however, here are a few general guidelines to help determine how much of your portfolio should include gold and silver investments.
Precious metals provide an effective hedge against market volatility, geopolitical risk and currency devaluation. Furthermore, precious metals offer wealth preservation by maintaining purchasing power while not being directly related to assets like stocks, bonds or real estate.
However, precious metals should not be seen as an alternative form of savings or retirement portfolio investments; rather they should serve as a supplement. 10% of your total assets is often sufficient for investing in precious metals in order to protect yourself against economic uncertainty without restricting other forms of investing and savings strategies.
