“The world of investing can be a jungle. Bulls, bears, danger at every turn”. This quote from the film The Wolf of Wall Street may seem a little dramatic but having a diversified portfolio is something both new and seasoned investors strive for.
With all the constant media hype about the latest investment craze or what you should be holding or selling it can be overwhelming to say the least and it’s easy to see why people can get a “bit coined” off with it all.
Luckily gold has it all in hand, and is to many investors is a symbol of safety, a way to protect yourself against a host of market uncertainties. Financial crisis, Geo-political risk and even war. In these times of uncertainty and panic gold has historically provided a safe haven in the financial storm.
Gold’s role is perhaps most significant in balancing your portfolio and acting as an insurance for your hard earned assets.
Gold reduces your portfolio volatility by enhancing the performance of your overall asset count, for example it may lie silent when your equities, bonds and other yielding giving assets are performing but when times become troubled as they repeatedly have over the years it is then gold’s time to shine as the metal rises and rises in value preserving your wealth.
Gold has zero counterparty risk meaning it is wholly independent from the banking system not relying on banks, government’s or other companies to provide wealth giving you complete control of your assets.
How much of your portfolio should be in gold?
Typically an allocation between 5% – 20% is the norm give or take either side. Of course if you tend to hold particularly risky assets a higher allocation may be wise. Likewise if you prefer lower risk assets you may feel an allocation of less than 5% is sufficient.
What will I make from investing in gold?
Gold has no yield and that is for some a too greater draw back to even consider holding gold as an asset. Of course there are gains to be made from buying and selling gold and there are other options to buy and hold gold as an asset other than physically holding it. However put simply you insure your house, your car even yourself why would you not insure your portfolio?
Looking for more information?
If you would like more information on the topic of investing in gold, or have any questions about the contents of this article please either download our Investing in Gold Guide or call 01202 611061 or email info@kkbullion.co.uk