Diversification & Balance
Financial Experts will agree that diversification is at the heart of a well balanced portfolio. In fact, most of our clients indicate that they are allocating between 5-20% of their investable assets into precious metals. Most are looking to secure their assets and protect their money from rising inflation and a difficult world economy. Of course, your exact percentage will vary depending on your individual situation and investment goals.
Regardless of what you’re investing in, you never want to have “all your eggs in one basket.” Stocks and Precious Metals are two different asset classes. Each class has its own advantages and disadvantages, but a diversified portfolio makes you less dependent on a single asset class for overall performance. When stocks and precious metals are combined into a single portfolio, a "non-correlated" asset is created. The "non-correlated" relationships of these two classes are ideal partners! When gold is rising, stocks are generally falling in value, and vice versa.
This concept of diversification is the same with Precious Metals. The key is to create diversification WITHIN your metals portfolio so that you are afforded the best opportunity for portfolio growth while protecting your money along the way. By appropriately blending and balancing your metal holdings, you realize the long range benefits of each metal type and class. This diversified approach is generally what we recommend to our clients who are positioning their metals for a long term hold and are seeking stability while protecting their other assets from inflationary concerns.