Some analysts recommend allocating 5–10% of your portfolio toward gold and silver. Others suggest allocating up to 25%. So you may be wondering, “How much gold and silver should I own?” It depends on your situation and needs. The allocation will differ for every individual. To help you decide how much gold and silver you may want to consider owning, we’ve gathered insights from across the country.
How Much Gold Should You Consider Owning?
Recommendations for how much gold you should keep in your portfolio vary.
Precious metals can be beneficial as portfolio diversifiers, but the amount of assets like gold, silver, or other precious metals that fit into your portfolio may depend on your unique financial goals.
In general, though, financial experts often recommend putting between 5 and 20% of your portfolio into gold or other precious metals, though some suggest an even greater allocation.
For example, in 2013, Jerry Wagner, founder and president of Flexible Plan Investments Ltd., launched the first and only registered mutual fund offering exposure to gold bullion, arguing that a “20-percent allocation to gold is the appropriate exposure for a traditional portfolio of 60 percent stocks and 40 percent bonds.”
Free-market analyst Harry Browne pushed this percentage still higher, advocating for a portfolio equally comprised of stocks, bonds, gold, and cash—putting each allocation at 25%.
Meanwhile, market guru Jim Cramer, host of CNBC’s Mad Money, suggests maintaining a gold allocation of up to 10%.
“I think that 10 percent is the upper limit because I consider gold as an insurance policy, and no worthwhile insurance policy should be 20 percent of the money you have [in your portfolio],” Cramer says.
MarketWatch journalist Mark Hulbert assigns a lower initial allocation to gold: 4%.
Hulbert says that a 4% allocation “is a good place to start in determining your portfolio’s default allocation to gold. You would deviate from that allocation only if you believe you have reason to believe that [portfolio owners] worldwide, collectively, are wrong about gold’s [price] relative to the stock and bond markets.”
Personal finance website The Balance recommends a range of 5–10% for holdings in gold.
“Depending on your situation and your risk tolerance, you might be more comfortable with a bigger or smaller share of gold in your portfolio,” the website notes. “In the end, gold can make a fine addition to your portfolio—as long as you know why you’re including it, and it helps you reach your long-term financial objectives.”
How Much Silver Should You Consider Owning?
According to CoinWeek columnist Al Doyle, every American should consider owning at least a little silver. But how much of your portfolio should silver make up?
John Roberts, founder and CEO of LiveLearnAndProsper.com, settles on 6% as his allocation for silver, with a recommendation of 2, 4, or 6% as a starting point depending on your risk tolerance.
“Of course, everyone’s situation is different. So you’ll need to decide…what works best for you,” Roberts writes.
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What Is a Good Gold-to-Silver Ratio to Own?
There is no one-size-fits-all answer to the question of what a good gold-to-silver ratio to own is because the ideal ratio for your unique portfolio can depend on a variety of factors, including personal financial goals, risk tolerance, and market conditions. Some portfolio owners prefer to maintain a ratio of 50:1 or lower, while others may be comfortable with a higher ratio.
Historically, the gold-to-silver ratio has averaged around 50:1, but it has fluctuated widely over time. During periods of economic uncertainty, the ratio tends to be higher, reflecting a preference for the perceived stability of gold. During periods of economic growth, the ratio may be lower, reflecting a preference for the industrial uses of silver.
Ultimately, finding the ideal gold-to-silver ratio for your portfolio may require doing your own research and determining your acceptable level of risk exposure. You may also wish to consult with a financial advisor before making any large-scale decisions regarding your portfolio.
GuruFocus.com suggests an overall 10–20% allocation of precious metals, with silver making up a 30% share of that allocation if you’re aiming to preserve wealth.
“Silver and gold belong in every balanced portfolio. There’s no magic percentage of silver and gold you should include,” GuruFocus.com advises. “Adjust your position in silver and gold according to your goals, your age, and the size of your savings.”
What does that look like? If you’re growth-driven, GuruFocus.com suggests allocating as much as 70% of a precious metals portfolio to silver and 30% to gold since “silver has a higher growth ceiling than gold.” And if you’re holding precious metals for the long term, says the site, “You have a greater chance of seeing a silver bull market.”
Bottom line: The right amount of gold and silver will vary from person to person, portfolio to portfolio. Choose the precious metals allocation that brings you—no one else—peace of mind. If you’d like to learn more about finding the right mix of gold and silver for your portfolio, read our gold vs. silver article for more on the differences between these precious metals.
Everyone has different financial goals and a different tolerance for risk. The allocations we present here are aimed at helping you find a unique balance of gold and silver that works for your equally unique portfolio. Request your free Gold Information Kit to get started.
