Your portfolio should be structured in a way that helps you achieve your long-term goals. However, many experts warn that you should be careful about the amount of gold you should include in your portfolio. A general rule is to limit gold to no more than 5% to 10% of your portfolio. Cramer recommends gold as the best place for Gold IRA because it tends to rise when everything else falls. It provides investors with insurance against geopolitical events, uncertainty and inflation.
The price of gold remains fairly stable, but it fluctuates slightly every day. The stability of the price of gold means that it is not necessarily the best investment for long-term growth. However, since investing in gold doesn't usually involve much risk, it makes gold a great tool for offsetting riskier investments. It would be useful to diversify the portfolio with gold as a hedge against inflation.
You will see the price of gold rise in response to certain events that reduce the value of stocks and bonds. It helps protect your portfolio against adverse stock market movements. Most estimates suggest that investments in gold should represent only 5 to 10% of your portfolio and no more. This will ensure that your portfolio has room for other investments, such as mutual funds, stocks, P2P lending, etc.
What are some good reasons to add gold to your portfolio? First, it is an asset that is not correlated with stocks and bonds. Stocks and bonds are negatively correlated, so when stocks go up, bonds tend to go down. Gold behaves like neither, making it an excellent asset class when considering diversifying against major equities and bonds. The easiest way to add gold to a portfolio is through an ETF called SPDR Gold Shares, commonly known by its symbol GLD.
Learn About Gold is a great source for more information on how to add gold to your investment portfolio. You might consider adding gold to your portfolio if there is a correction in gold prices if your portfolio lacks an adequate allocation to this asset.