How much physical gold do you need to own?

The traditional financial advice is that gold should represent 5 to 10 percent of assets, or 10 to 20 percent if home equity is not included. 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.

Depending on your situation and your risk tolerance, you may be more comfortable with a larger or smaller share of gold in your portfolio. These coins usually have attractive designs, have historical value and contain a smaller amount of gold, but they still cost more because of their numismatic value. Before buying physical gold or investing in gold-backed stocks or funds, make sure it fits your investment strategy, financial objectives, and risk tolerance. Consumers are advised to be especially aware of the spot price of gold, as these ATMs sell the precious metal well above this price and above the prices of most other retailers.

Even if the gold bars are genuine, the seller's charges can be exorbitant and buyers may have trouble processing gold through customs, depending on the quantity purchased. Three of the largest ETFs include SPDR Gold Shares (GLD), iShares Gold Trust (IAU) and the Aberdeen Standard Physical Gold Shares (SGOL) ETF. The Mint contains 91.67% of gold, but it costs more than pure gold bars because of its value as a collector's item. Paper gold serves to protect portfolios and is used to diversify portfolios, which usually provides balance in times of market uncertainty.

That's one of the reasons why legendary investors, such as Warren Buffett, warn against investing in gold and instead advocate buying companies with cash flow. On the contrary, the owners of a business, such as a gold miner, can benefit not only from the increase in the price of gold, but also from the company's increase in profits. In general, reputable gold sellers must disclose all fees required to close a transaction in advance. Gold is considered a “safe haven asset” because when the prices of other investments, such as stocks or real estate, fall sharply, gold doesn't lose its value.

While the price of gold can be volatile, gold prices tend not to move in conjunction with stock and bond prices. If you want to add some balance to your portfolio, gold can be one way to do that by diversifying your assets so that it can partially protect you from a market event. In general, gold jewelry tends to sell at a significant price increase due to craftsmanship and retailer costs.