Investing in Precious Metals and Cryptocurrencies: Investors Suggest How Much to Allocate to Your Portfolio
The COVID-19 pandemic has created unprecedented challenges for the global economy, sending shockwaves across financial markets worldwide. As a result, many investors are turning to precious metals such as gold and silver as a move to protect their portfolios from volatility and uncertainty and adding cryptocurrencies that do not correlate with traditional markets. But what percentage of your portfolio should you allocate to precious metals and cryptocurrencies? According to developers & investors at the mobile app GoldAndSilverApp, the answer to this question is not as straightforward as you might think.
In a recent blog post titled "How Much Should I Invest in Precious Metals and Crypto?", GoldAndSilverApp provides valuable insights on how to determine the ideal percentage to allocate to gold and silver and other alternative assets.
Determining How Much Money You Should Put into Precious Metal and Cryptocurrency Investments
The blog post explains that there is no one-size-fits-all approach to investing in precious metals. The right percentage to invest depends on a variety of factors, including your investment goals, risk tolerance, financial situation, and portfolio diversification strategy. With that being said, a spokesperson for GoldAndSilverApp suggests: "When central banks in developed countries are buying unprecedented amounts of gold versus the previous fifty years, you should consider making a move on gold and precious metals."
"The key is to strike a balance between your risk and return objectives while taking into account the unique characteristics of precious metals as a Tier One asset class. By understanding how much you should allocate to precious metals and other alternative assets, you can build a well-diversified portfolio that can weather market volatility and help you achieve your long-term financial goals."
Gold, Silver, and Crypto Investing: How much of your portfolio should be in gold?
The article suggests allocating no more than 5-10% of your portfolio to cash and/or cash equivalents, including precious metals and cryptocurrencies. Whereas the other components of a portfolio are to be devoted to assets for the purposes of generating income, the article says, that up to 5-10% is specifically to preserve the value of one's money and hedge against inflation. This portion includes precious metals for that reason, rather than as an income-generating asset. Treasury Inflation-Protected Securities (TIPS) is another suggested hedge against inflation in this percentage. Cryptocurrencies, meanwhile, can be added for diversification.
The blog post offers other practical tips and insights to help investors determine the optimal allocation for their portfolio, including:
- Understand the Role of Precious Metals in Your Portfolio: Precious metals such as gold and silver are often seen as a hedge against inflation and currency devaluation. They can also provide diversification benefits and act as a store of value during times of economic uncertainty. Investors should evaluate the role that precious metals play in their portfolios and allocate an appropriate amount based on their investment goals and risk tolerance.
- Consider Your Financial Situation: Investors should assess their financial situation, including their income, expenses, debt, and other financial obligations, to determine how much they can realistically afford to invest in precious metals. A general rule of thumb is to allocate no more than 5-10% of your total investment portfolio to alternative assets such as precious metals and crypto. For those who cannot afford large amounts of gold or silver upfront, GoldAndSilverApp also offers alternative ways of purchasing and owning physical gold and silver.
- Evaluate Your Risk Tolerance: The amount you should allocate to precious metals also depends on your risk tolerance. Investors who are more risk-averse may choose to allocate a higher percentage of their portfolio to precious metals, while those who are more comfortable with risk may choose to allocate a smaller percentage.
- Consult with a Financial Advisor: Working with a financial advisor can give you informed guidance as to how much to invest in precious metals and other alternative assets. A professional can help you evaluate your investment goals, risk tolerance, and financial situation and recommend an appropriate allocation based on your situation.
Precious Metals and Crypto: What is the best way to invest?
GoldAndSilverApp's blog post on how much to invest in precious metals provides valuable insights to help investors build a well-diversified portfolio and hedge against inflation. By considering the up to 5-10% rule of thumb, understanding the role of precious metals in your portfolio, evaluating your financial situation and risk tolerance, and seeking professional financial advice, you can make informed decisions about how much to allocate to precious metals and other alternative assets.
About GoldandSilverApp:
GoldAndSilverApp (a.k.a. Gold Silver Price & News) is a historical Android app that provides real-time prices and alerts for gold, silver, and other precious metals including platinum and palladium. With over 500,000 downloads and 8,400+ ratings on the Google Play Store, and soon to be offered as a cross-platform Progressive Web App, Gold, and Silver Price and News is a choice app for gold & silver stackers, as well as professional investors, to view 24-hour real-time charts of precious metal spot prices and make informed investment decisions. The app's domain, GoldAndSilverApp.com, was recently acquired by the precious metals marketing agency CPMDF (Crypto, Precious Metals, and Decentralized Finance).
For more information about how much to invest in precious metals and crypto, visit the GoldAndSilverApp blog at https://goldandsilverapp.com/blog/.
