Hi,
When you’re building a strong, diversified portfolio of investments, you most likely reach for the foundations of diversification—stocks, bonds, and real estate. But the precious metals like silver, and gold also deserve a spot in your portfolio. These tried-and-true investments are not only for connoisseurs but also a savvy means of diversifying against market fluctuations, inflation, and currency risk.
At AU Bullion, we guide investors of all sizes in adding physical precious metals, such as silver and gold, to their portfolios. Here’s why they should be in yours.
Definition of Portfolio Diversification
Diversification refers to the diversification of your holdings in various asset classes to minimize risk. When a component of your portfolio falls, another may stabilize or increase, thus sparing you huge losses in the event of a bad economy.
Standard portfolios will include:
- Equities
- Fixed income (bonds)
- Real estate
- Cash or equivalents
The inclusion of precious metals brings a physical, inflation-protected asset that behaves differently from these major categories.
Why Precious Metals are a Must in Your Portfolio?
- Hedge Against Inflation
When the paper currency value declines, the value of silver and gold does not change or increases. This is why they are also called a hedge against inflation.
- Safe Haven in Uncertain Times
During episodes of financial volatility, stock market meltdowns, or geopolitical conflicts, investors move their capital to physical assets like gold. The “flight to safety” protects the preservation of wealth.
- Weak Association with Other Investments
Gold and silver almost never move in the same direction as stocks or bonds. Because of the low correlation, they are ideal for volatility hedging elsewhere in your portfolio.
- Physical Asset, No Counterparty Risk
Unlike stocks or ETFs, you actually own physical precious metals that you hold, retain physical possession of, and keep in your possession. There is no reliance on someone else to deliver value.
- Long Store of Value
Silver and gold are not only commodities, they are also timeless treasures of worth that go beyond monetary systems and civilizations. They have been known to be worth their weight for centuries.
How Much to Allocate?
There’s no hard and fast solution, but most experts recommend 5% to 15% of your portfolio to be allocated to precious metals, dependent on risk tolerance and objectives.
For example:
Conservative investors could own 5% of silver and gold to reduce risk.
Moderate investors could target 10% in order to protect against inflation and overseas shockwaves.
Active investors who are hoping for protection from down markets might trend in 15%.
How to Invest in Precious Metals
AU Bullion provides a range of investment-grade products such as:
- Bars of Gold and Silver (1 gram to 1 kg)
- Standard Coins such as the Maple Leaf, Silver Eagle, and Britannia
- Monster Boxes and Tubes for bulk discounts
- Platinum and Palladium Bullion
- Proof and Coinage Coins
All products are genuine, insured, and competitively priced, and they also offer storage and buyback facilities. Start Diversifying with AU Bullion. It is easier than you think to invest in precious metals. As a beginner or seasoned investor, AU Bullion makes investing in bullion convenient and hassle-free with clear, upfront pricing, trustworthy service, and a wide selection of bullion to fit you. Visit us in-store in Toronto or Vancouver, or buy our products from our website.
