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How to Diversify Your Investment Portfolio with Precious Metals

At the U.S. Gold Bureau, we recommend that our clients not only diversify into precious metals, but also within precious metals, to make their portfolios as balanced as possible. With traditional investments, this might mean splitting your assets between stocks and bonds. With precious metals, the balance is between gold, silver, and other metals – and by metal types, such as bullion and investment grade coins. So what’s the difference? Why does it matter?

What Form Does Gold Bullion or Silver Bullion Come In?

Bullion can be found as bars, government-minted coins, and privately minted coins, called “rounds.” Regardless of the form factor, they are all valued by their weight and metal content. The value of bullion items floats up and down every minute with the market price of the gold, silver or other metal they contain. This is commonly referred to as the “spot price” and it’s also how the market works for traditional commodities -- like crude oil, wheat, and pork bellies, for example.

What are Investment Grade Coins?

On the other hand, Investment Grade Coins, which are the best specimens of certified coins by class, have a value that is driven more purely by supply and demand, much like prime real estate, fine art, or other non-reproducible tangible assets.

Since the price of Investment Grade Coins is not driven by the “spot price” of the metal, ownership of these coins, as part of a balanced portfolio, can help to offset some of the volatility of the commodity and equities markets.

The market value of Investment Grade Coins is also not subject to manipulation by the banking system, the Fed, government oversight, or other political forces. This is a unique factor that can make them appealing to investors looking for an alternative to traditionally regulated assets of the classical financial industry.

The Difference Between Bullion and Investment Grade

The most important thing to remember about bullion and Investment Grade Coins is that their performance does not correlate to the performance of stocks and bonds, meaning they do not necessarily go up and down at the same time. That’s why an investment portfolio that contains a balance of both is considered to be better diversified and less volatile as a long-term investment.

So what mix of bullion and Investment Grade Coins is right for you? It all depends on your individual tolerance for risk, your time horizon, and your liquidity requirements. Owning precious metals as part of your overall investment portfolio is not without risks. All investments, including precious metals, can go up and down in value. An Account Executive from the U.S. Gold Bureau will explain your options and help to customize a portfolio that best meets your goals and objectives.

We look forward to working with you and putting you on a path to a more secure and more prosperous future.

For a free consultation, call (800) 775-3504.

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The Bottom Line

You are doing the right thing to diversify INTO precious metals. But don't forget to also diversify WITHIN precious metals, or you could be right back on the same roller coaster ride that you have no doubt experienced with your traditional investments.

Watch this short video to learn how to diversify within precious metals using Investment Grade Coins to protect your investment portfolio over the long-term.