A general rule of thumb is to limit gold to no more than 5% to 10% of your portfolio. Depending on your situation and risk tolerance, you may be more comfortable with a larger or smaller share of gold in your portfolio. The share of your portfolio that you dedicate to precious metals will depend on your risk sensitivity. In general, experts suggest that between 5% and 15% of their portfolio be dedicated to precious metals.
The specific amount of your portfolio that should be devoted to precious metals varies depending on your circumstances. Some people may do well with up to 20% of their investments in precious metals; however, others may do better with just 1%. Research has shown that the “sweet spot” for the percentage of gold in the portfolio is 20%. In the long term, this provides the best balance between risk and reward.
Peter Schiff has always recommended having between 10 and 20% of a portfolio of investments in physical precious metals. But how much of that percentage should be in gold and how much in silver? Of course, this list doesn't include everything, and there are other considerations to keep in mind as well. In terms of what financial professionals can recommend, we've seen generalized numbers from 1 to 20 percent. Where one can fall within this spectrum depends on several factors.From an investment theory standpoint, precious metals also provide a low or negative correlation with other asset classes, such as stocks and bonds.
This means that even a small percentage of precious metals in a portfolio will reduce both volatility and risk. That said, many so-called “experts” recommend investing in stocks, with an investment of 30 to 40% in precious metals.In general, it is said that between 10 and 20% of that should be in gold and silver each, although that depends on you. This allocation can be a little more confusing considering platinum, palladium, and other metals as well. Talk to your financial advisor about investing in popular low-risk gold or precious metal ETFs before you start investing in gold and precious metals.