Precious metals as a diversification vehicle
Monday, July 14th, 2008Most financial professionals agree that precious metals should make up around 10% of your portfolio. The question then comes up as to which form should it take. You could invest in a pool account, or buy physical metals but keep it with the entity you bought it from, or buy into an ETF, or buy and take physical position of it, or even buy shares of an actual gold mine. The form you select depends on your motivation for diversifying into precious metals. For us, we elect to buy physical gold and take position of it. Our view is that in diversifying into gold, we are protecting ourselves against a serious market downturn. In such a case, the other types of accounts may not be able to meet the demand of those wishing to cash out and take position of physical gold. Plus, nothing helps ease the pain of a market bump then knowing that you have a healthy stash of a solid physical asset.
