How important is gold for your investment portfolio?

[MKKShah]

I am now in the process of building a diversified investment portfolio. While I am still deciding on Mutual funds and asset allocation across investment types, a colleague of mine told me over lunch that he considered gold as the only long term store of wealth. He kept going on and on about fiat currencies and such and also mentioned that he keeps almost 70% of his investments in gold. This is someone I respect very much, but was taken aback at this revelation. I also think 70% is a bit excessive.

How important is gold in your portfolio?
What percentage of your investment portfolio is gold?
If you do have gold, how do you own it? Do you physically own it? or is it in the form of GLD shares?

I simply cannot bring myself to accept that gold has any use or value. I think it's a useless metal, and has only novelty value, and I am not about to invest a percentage of my savings in a novelty metal. But am I wrong? If enough people think of gold as a store of value, perhaps it is? Where do folks stand on this issue?

[bjl584]

Right now, I would rather invest in mining companies and in mine equipment makers than in the end product.

I currently don't own any precious metals. Not to say that commodities don't play a part in an investment strategy, but I think that most commodities have had a nice run and are now overbought. Wait for the pullback before jumping onboard.

[BuckyBadger]

Not at all important to my investment portfolio.

Although my husband does collect coins, and I have a shotgun, so should the apocalypse come, we'll have a few thousand dollars worth of Morgan Silver Dollars and a gun...

[disneysteve]

Not at all important to my investment portfolio.

Agreed. We do have a very small position in a precious metals fund in my wife's old 403b plan. I did it just for the heck of it and got in before the huge run up in prices so made a great profit but it is a tiny percentage of our overall portfolio.

[MonkeyMama]

0% gold - I personally wouldn't invest in it.

{A mutual fund that invests in commodoties - maybe - but only for a small portion of my portfolio. It's not important enough to have done it thus far. If it's not inside a retirement account, gold has higher taxes than most any other investment}.

[Slug]

I think gold has a place in a well-diversified portfolio. I would never go near a 70% allocation though. Still you might check out the Crawling Road blog and read about the Permanent Portfolio. I do have some assets in the underlying mutual fund and ETF (PERM). All that said, it's only a very small portion of my portfolio.

[MKKShah]

Although my husband does collect coins, and I have a shotgun, so should the apocalypse come, we'll have a few thousand dollars worth of Morgan Silver Dollars and a gun...

So you recommend that I keep physical possession of gold, if I do invest?

[MKKShah]

Agreed. We do have a very small position in a precious metals fund in my wife's old 403b plan. I did it just for the heck of it and got in before the huge run up in prices so made a great profit but it is a tiny percentage of our overall portfolio.

Given the huge run up, are you looking to sell it now? Do you think gold is just about done with it's rise?

[BuckyBadger]

So you recommend that I keep physical possession of gold, if I do invest?

No. I was being sarcastic.

Most of the people who are gung ho on physical possession of precious metals have some sort of end-of-times complex. IN that case, I think a gun and a lifetime supply of Brita filters would be a hell of a lot more useful.

[disneysteve]

Given the huge run up, are you looking to sell it now? Do you think gold is just about done with it's rise?

I probably should, but since it represents only 2 or 3% of our portfolio, it doesn't much matter. I'll probably hang on to it just to have a little exposure to the sector.

[97guns]

my entire portfolio consists of 50% income generating real estate and 50% physical precious metal. my portfolio has done very well in the past 2 years, actually the healthiest its ever been including the dot com run up, in 2 years it is up 90% nearly a double up.

[ukgaz]

I have a percentage of gold/silver in my portfolio though I expect it to be a small % in the long run. It doubles up as a hobby as I like to collect different coins.

[MKKShah]

my entire portfolio consists of 50% income generating real estate and 50% physical precious metal. my portfolio has done very well in the past 2 years, actually the healthiest its ever been including the dot com run up, in 2 years it is up 90% nearly a double up.

Are you comfortable with the diversification that these two asset classes provide?

More importantly, how do you own gold? Do you keep it with you? in a locker? ETFs?

[KTP]

Are you comfortable with the diversification that these two asset classes provide?

More importantly, how do you own gold? Do you keep it with you? in a locker? ETFs?

I guess you could wear it as a grill...that way you would always have it ready at hand if the end times come.

[kork13]

Most of the people who are gung ho on physical possession of precious metals have some sort of end-of-times complex.

my entire portfolio consists of 50% income generating real estate and 50% physical precious metal.

hmm.... case in point?



Personally, I have no idea what portion of my investments are in precious metals... it's probably at zero right now. I don't care for them as investments. At present, I'd be willing to have perhaps 2-3% of my portfolio in a precious metals ETF (not a chance on physical possession of individual metal positions), and I wouldn't be comfortable with any more than 5% MAX in precious metals. Side note here.... now is NOT the time to buy into precious metals. Seriously? They're at a peak that was unheard of less than a decade ago. It would be utter lunacy to buy any significant position in them right now.

Yes, acceptable level of risk is a personal matter... but I don't think any reasonable professional could, in good conscience, recommend more than 10% of a person's portfolio in precious metals (or in any single stock or other position).