When it comes to investing, the amount of money you dedicate to precious metals will depend on your risk tolerance. Generally, we suggest that between 5% and 15% of your portfolio should be allocated to these assets. However, those just starting out may be better off investing only 1-2% in precious metals. In some cases, it may be beneficial to invest more heavily in these metals earlier in your investment career.
For example, Peter Schiff recommends having 10-20% of your portfolio in physical precious metals. When deciding how much gold and silver to include in your portfolio, it's important to consider your long-term goals. Many experts suggest limiting gold to no more than 5-10% of your investments. Depending on your risk appetite, you may be comfortable with a larger or smaller share of gold.
Research has shown that the optimal percentage of gold in a portfolio is 20%. This provides the best balance between risk and reward over the long term. From an investment standpoint, precious metals also offer a low or negative correlation with other asset classes such as stocks and bonds. This means that even a small percentage of these metals in your portfolio can reduce volatility and risk.
