Thinking about your precious metals portfolio?
Opting for the appropriate gold-silver mix should be a strategic move. Whether you want to play more conservatively or need to gamble a little bit to hedge a good profit, your choice should be based on your risk tolerance and time horizon. Below are four distinct risk-based model portfolios.
Conservative Portfolio: 80% Gold / 20% Silver
If capital protection is your utmost priority, this mix gives you the assurance of some stability. Gold has long proven itself as a store of value, and that hint of silver gives some inflation-responsive capability. Rebalance if and when the gold-silver ratio breaks below 60. This mix is ideal for IRAs and longer-hold investments.
For example:
Balanced Portfolio: 60% Gold / 40% Silver
This portfolio is a combination of conservatism and growth. It’s not overtly aggressive and perfect for moderate risk takers who would like to take part in economic cycles and find some hedge in silver, too. Rebalance your allocations when the gold-silver ratio crosses 75. All of these products qualify for tax-deferred retirement accounts, too, such as precious metals IRAs.
For example:
Growth Portfolio: 40% Gold / 60% Silver
For investors seeking higher returns and willing to tolerate greater volatility, this portfolio puts silver at the forefront. A great strategy during periods of low rates or when industrial demand is heightened. Rebalance when silver’s performing excessively well relative to gold, or the gold-silver ratio approaches 55.
For example:
Speculative Portfolio: 20% Gold / 80% Silver
This high-upside strategy leans on silver’s historical price spikes during industrial booms and inflation cycles. This strategy is not for the faint of heart; it is meant for boom cycles and fast transitions. Silver has a short-term capital-gain tax burden, higher than gold, so be strategic about taxable accounts; rebalance at least every three months.
For example:
Disclaimer:
The views expressed by Ric Bender are for informational, educational, and entertainment purposes only.
Investing involves risk. You must be aware of the risks and be willing to accept them in order to invest in financial instruments, including stocks, options, and precious metals.
