Discussions of precious metals investment understandably tend to focus on the role of gold and silver in fortifying portfolios during times of economic and/or geopolitical upheaval. Modern history includes countless examples of gold and silver thriving while traditional investments are under tremendous pressure – notably, equities.
Sometimes those metals-up/equities-down periods are very brief. Other times, they can last for years. For example, in America’s economically tumultuous decade of the 1970s, gold and silver skyrocketed 1,500% and 2,100%, respectively, while the Dow Jones Industrial Average nudged upward just 2%.
We less frequently hear that investors should hold silver and gold as core portfolio assets, rather than acquiring them only during times of distress. One of the better articles I’ve come across recently on this subject is over at GuruFocus.com, titled “How Much Silver Should Be in Your Portfolio?” Author Jacob Maslow pays nearly as much attention to gold as silver in this article, focusing on how much silver and/or gold you should maintain in your portfolio at all times.
Article: Older Investors Should Have Up to 20% Allocated to Gold and Silver
“Maintain” is the operative word. The best feature of the article, as I see it, is the assumptive, matter-of-fact tone the author takes in discussing how precious metals should be a standard portfolio asset. Note that the title of the article does not ask if silver should be in your portfolio, but rather how much.
Maslow suggests younger investors maintain 5% of their total portfolios in silver and gold, while more seasoned investors for whom capital preservation is of paramount importance should consider precious metals allocation of as much as 20%. Again, these are Mr. Maslow’s figures, not mine. Each investor has to decide to what extent any of their portfolio should be allocated to gold and/or silver. It is, however, refreshing to see an article written outside of the precious metals community that doesn’t limit consideration of gold and silver to only times when traditional assets are in distress.
A Precious Metals “Partner” ALSO Can Be a Valuable Asset
When an investor has a standing allocation to precious metals, it’s easier to add to that position as you determine conditions warrant. For example, if you have an established relationship with a gold and silver company, you need only pick up the telephone to contact your account executive and discuss increasing your allocation.
This advantage is of particular importance as storm clouds continue to gather over traditional assets. With interest rates on the rise, trade relations souring, and a host of other threats closing in on the stock market, a minimal “standard” gold and silver allocation may not be enough to help offset effects of the financial crisis many are now predicting.
If you are interested in beginning a relationship with a company that has a great deal of experience in physical gold and silver acquisition for retirement investors, call Augusta Precious Metals at 855-242-4121. The professionals at Augusta love working with IRA and 401(k) account owners who are seriously considering the purchase of physical gold and silver for a tax-deferred retirement plan, but aren’t sure where to begin. At Augusta, we very much look forward to helping you protect your assets through silver and gold ownership.
For many astute investors, the question is not if they should add gold and silver, but how much. This assumes, as Mr. Maslow does, that precious metals always should be part of a portfolio. It also implies precious metals allocation will increase with any impending volatility in the economy and financial markets. In my opinion, this tactical asset allocation approach – increasing the weighting of a core asset when conditions for that asset improve – is an excellent strategy for realizing your long-term investment objectives.