How Much Gold Should I Have in My Portfolio?

Gold is a great addition to your portfolio, whether you’re looking to save for retirement or just have a solid investment in case of economic crisis.

When individuals are looking to incorporate gold into their investments through a gold IRA, they often wonder how much gold they should have in their portfolio in comparison to traditional stocks. Diversification is important in any type of investment, but adding a physical asset like gold complicates diversification.

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How much gold should I have in my portfolio?

In general, experts recommend having 4–8% of your portfolio be gold.

 Investing in gold provides a nice hedge to your traditional stock investments in the event of an economic crisis.

By having this small percentage of your portfolio be gold, you have an ideal amount of diversification. Of course, you’re free to include more or less gold as you and your financial advisor see fit. Depending on your financial goals, you might decide to increase your gold holdings.

Benefits to having gold in your portfolio

There are many reasons why you should include gold as a portion of your investment portfolio. Not only can gold be a lucrative investment, but it can also diversify your investments.

Stable investment

Gold has proven to be an incredibly stable investment over time. In the long term, gold often increases in value. One of the benefits of investing in gold is that it retains an inherent value, and you’ll always have the physical gold, so your investment will never disappear.

Diversify

One of the main reasons people choose to invest in gold is because it diversifies their portfolio that contains traditional investments like stocks. Gold acts as a failsafe in case your other investments plummet or the stock market crashes.

In addition, gold serves as a great counterpart to stocks because the price of gold tends to be opposite that of stocks. For example, when the economy is doing poorly and the price of stocks goes down, gold prices tend to rise.

Backup to fiat currency

In the event of a global economic crisis, gold serves as an alternative to traditional currency. If the economy crashes, paper money will become worthless, and we will be forced to rely on alternate forms of currency to sustain ourselves. This is where gold comes in—gold will retain its inherent value, so you will always have a safe source of income. Gold will still be valuable as a means to trade.

How do I incorporate gold into my portfolio?

In order for your gold investment to be an official part of your investment portfolio, you’ll need to open a gold IRA. Placing your gold in this type of account ensures that it is approved by the IRS and is recognized as part of your investment portfolio.

You’ll need to find a custodian who can manage your gold IRA, but from there they should be able to guide you through the whole process and make sure everything will work well on the back end of things.

Start investing in gold today.