A Simple Practice of Investing in Precious Metals for Beginners
Investing in precious metals can be intimidating – but there are easy ways to do it. You don’t need to understand the ins and outs of complex methods like options trading to make gold investing work for you.
Read on to discover a simple strategy that will allow you to make investing in gold and other precious metals part of your investment strategy, allowing you to benefit from their diversification and inflation protection opportunities.
What the investment trend looks like
This routine has a straightforward setup that doesn’t take much time to use. Start by deciding on a fixed, limited allocation of gold or other precious metals, such as silver, in your portfolio. Financial advisors often recommend keeping your total gold allocation at 5% to 10% of your portfolio. But you don’t have to get there quickly. Dollar-cost averaging — or investing a fixed amount at regular intervals — is a practice that will help you build your exposure.
Review your entire investment portfolio regularly, such as once or twice a year, to help ensure that precious metals do not rise or fall in value enough to take up too much or too little of your portfolio. If your desired range is 5-10% of your portfolio, it would make sense to buy more gold when the total allocation falls below 5%. Similarly, selling gold is a better option if it is more than 10% of your portfolio. A multi-year or annual review allows you to stay happy with your portfolio without being overwhelmed by excessive portfolio reviews.
Gold Investor Kit Gift: Sign up with American Hartford Gold today and get a free investor kit, plus up to $20,000 in free silver on qualifying purchases.
How to start a habit from scratch
The first step to embedding this trend in your portfolio is to make sure gold makes sense for you. Not everyone should invest in gold. It usually makes sense if you have a long time horizon and enough cash to cover immediate expenses.
If you decide that gold accumulation fits your goals and risk tolerance, the next step is to choose a small initial target percentage, such as 3% of your portfolio. Then, add slowly until you reach your threshold. At that point, you can decide if you want to stick closer to the more common 5-10% range or hold firm with gold representing 3% of your portfolio.
Although investing in physical gold can be difficult, you can buy shares of gold and silver exchange-traded funds (ETFs) just as easily as you buy shares in stock ETFs.
Free Silver: See how you can get up to $25,000 in free silver with American Gold & Silver Group
Why this practice works better than reacting to articles
Guided, calendar-based adjustments to your portfolio allow you to avoid emotional trading decisions that can increase losses. Some investors panic during inflation and sell their assets, but those investments usually recover in the end. When they do, investors who pull their money aside suffer. On the other hand, when the asset is rallying, you may be tempted to buy on fear. However, you may be buying an asset when the price is already high, and allowing it to take up a large portion of your portfolio may not make sense for your goals and risk tolerance.
Beginners making annual or annual portfolio changes can avoid chasing spikes or bailing out during dips.
Volatility Shield: Read about Newport Gold Group precious metals price matching
