What metal would you buy for 20% of self worth long term 30 years span

As the question says, if one is planning to buy sizeable amount of metal for 30 years what would you buy?

50/50 silver and gold or just silver or gold

Ie it would be money that would be used last as a back stop if misfortune befalls me or left in a will for someone else to enjoy.

As a 46 year old just looking at options.

 

Neither... that ties up too much portfolio value which could be put into better growth investments like equities or real estate or a business.

If you are using the gold as the cash / cash equivalent /savings portion of your portfolio where you don't expect much growth yet keep it as an emergency fund, that makes more sense, but the percentage is slightly to waaaay too high (depending who you ask). If you are using the gold as a temporary value store to keep money on the sidelines while you wait for a paper market crash or real estate dip, that also makes sense... but you sure wouldn't be holding that buying power for 30 years - probably 1 or 2 years at most. I personally like roughly 10% metals, but it's not necessarily long term (hovers from roughly 5-15% depending on how metals prices are and how I think the paper market might fare in the near term). All of my gold and silver are instantly for sale when a spike in price hits, but that's just personal preference. Even the most bullish gold hype guys like Jim Rickards seldom recommend any more than 10% of net worth in metals. Most hedge fund guys use 3-10%... and a lot use 0%.

...Assuming you are dead set on the idea, 100% Gold or 90/10% gold/silver would be the most logical for any big dollar amount, though. You can hide or move or ship gold more easily and definitely sell a large $ amount of it quicker when you eventually want to. Selling 50 coins 1oz of gold is a lot easier than 125 bars of 1 kg of silver. GL

 

I am aiming for 25% Gold and 75% Silver but that is just my personal preference. From what I have seen, gold is less volatile than silver so think of gold as a firm base and silver as more speculative. Or, if you like, gold as bonds and silver as stocks.

 

95% silver, 5% gold

 

From memory when I was at the Perth Mint, of the clients who did do both gold and silver (many were entirely gold or entirely silver), I'd say about 90% of those were 50/50. Whatever allocation you do, just make sure you rebalance back to 50/50 on a regular basis, this will make a big improvement in returns as it is a way to force you to sell the metal that has gained and buy the one which is cheap.

 

If we are talking longer term (i.e 30 years) then suggest buying to the GSR (Gold Silver Ratio). So currently that would be towards silver (i.e 80% to 20% gold). Once GSR swings back then move silver to gold, etc.

Run up in 2011 had GSR 31:1. Its currently approximately 84:1. Even if you are a heavy gold bug, you would still need to look towards the better buying opportunities. If someone was towards silver (i.e 80% to 20% gold) in the run up to 2011, then would have walked away with a decent profit in extra gold. Its all about the ounces IMHO

 

98% silver, 2% gold for me. The only thing I don't like about that is the storage fees but I am confident it will all be worth it in the end.

 

moving from 46 into 76
Aged 46 + 4 = 50 +5 =55 + 5 = 60 +15 =75-80

as you aged, the need for gold would goes up as your ability to lift silver is declining, unless you have a bot to take care of that need
as people get older, the need for more liquid gold is more, so the need to silver would be lesser
if your 20% is also part of the residential property calculation, then gold would be more or less stable 1-2 years of cash need

there would be swap from silver into gold as you aged

 

Nice Question. As a 71 y/old this way & in good health I am still accumulating.
Optimistic, some may say, but as I'm planning to live forever that keeps me from focusing on the inevitable.
Differing scenarios of how the monetary RESET will pan out, peacefully, or not so, I am changing my strategy v's a vi metal & size of each. _JLG.

 

The mark-ups taken out of your account on each flip from one to the other have to be accounted for when doing your re-balance, of course, but the Precious Metals Dealers won't mind you doing that, lol. _JOHNLGALT.

 

To minimise trading costs you would only rebalance say once it goes past 60/40 or 40/60 and I would be assuming this would be unallocated or some other low fee account. You could keep a core in physical, say 25% gold and 25% silver and the remaining 50% is in unallocated to handle the rebalancing.

 

Thanks for the reply Bron, "I would be assuming this would be unallocated..."
unallocated reminds me of the CLAYTONS advert.
No unallocated for this little black Ducky, too close to the RESET to be in unallocated.

 

Physical silver 90% and shares in silver miners 10% due to silver being a depleting resource and the industry uses for silver are ever increasing going forward. Silver is forecast to overtake oil as the #1 commodity and to be the worlds future primary source of energy.

A more safe option could be an equally $ balanced portfolio of physical gold ,silver , platinum , palladium and maybe rhodium.

 

Stocks are much more dangerous than silver. Silver is safer than bonds. Silver is a confirmed bet - 30 year's time, 101% chance it is worth more than today, whereas an entire generation of stocks may be wiped out due to war, 4th industrial revolution.

 

"30 year's time, 101% chance it is worth more than today, whereas an entire generation of stocks may be wiped out due to war, 4th industrial revolution.".

By that quote, you are a student of history, and will not be destined to live it.

 

It depends what you are using that portion of your portfolio for. Stocks have a much better track record of growth, and the safety of equities is pretty good if you use a value investing method (ie, Graham/Buffet).To someone who needs a growth-oriented portfolio (usually a young or middle aged pre-retiree), minimal growth assets (ie, metals with no cash flow and very slow capital gains) is actually very dangerous.

If it's for growth, then it is significantly more dangerous to have the money tied up in metals, CDs, or other cash equivalents. best, those roughly keep up with inflation. You miss tons of opportunities.

If it's for cash flow, then it's also much more illogical the monies in metals than bonds, dividend stocks, or real estate. Metals don't cash flow at all.

If it's for wealth preservation and savings or store of value, then the metals do make good sense. They aren't as liquid as cash savings, but generally keep up with inflation and can work well in the overall equation.

The whole preservation section of the portfolio generally won't be more than 0-15% of most people's portfolios due to minimal growth potential and limited cash flow, though. Usually, pre-retirement people want something like 60/30/10 growth/cashflow/preserve... and retired people tend to settle around 20/70/10. To each their own, though.

 

Hi all,

Thank you for all your inputs, to elaborate as a 46 year old, I feel I am now on the second half of middle age (not that I feel old), I still feel 31 everyday (my gf is 31 )

The OP would have been better phrased as "Short term implications for 30 year long term plan"

Over the last 20 years like many people my age the MEGA property boom from my first home to few investment properties was a a life changer, however I have sold all my properties starting from 2015 to 2017, now I have none. (Yes started selling too early)

And like most people my age, I didn't have much money in stocks in 2008 crash GFC, every spare cents into my mortgages. Though from 2011 I've been being buying Australian and US stocks rather than paying down mortgages with my salary and later with the proceeds of my property sales.

The original foresight when I started to sell properties was that below will occur

a. property crash
b. later stock market crash
c. move back to property, but keep 10 to 15% in cash,

I was wrong with the timing, the more I think about it now, I believe that property and stock market crash might occur simultaneously.

Therefore I am delaying properties, but still selling stocks at a faster rate and my cash position is increasing.

In my mind over the next three years I am of 99% certainty that the below statements are true,

1. Properties will be cheaper in few years
2. Stocks will be same or cheaper in three years time
3. Mortgage Interest rates will be higher (regardless of RBA)

I dont want to keep all my cash in banks since property is the backbone of Australian banks, hence the a sizable metals position.

Just not sure if going all cash/metal short term is the right but I will be at the cusp of 50 in three years, am I being prudent or am I been too overly cautious?

 

You are pretty young, so I would be careful being so bearish on the markets. Talking about being 20% in gold and predicting both a stocks and real estate crash soon is pretty doom and gloomy. I know the gold sellers tend to preach the evils of stocks and blah blah, but it is just not the truth. Yes, it is good to limit risks, but growth oriented portfolio means a younger and better quality retirement. I completely get where you are coming from with inherent mistrust of rapidly growing market values, but nobody can predict the future. It is also just generally psychologically healthier and nicer to be generally positive and hopeful about the market (all of the markets)... not hoping for crashes and being upset when you miss out on gains. Being invested but somewhat diversified lets you do that optimism, while just sitting with your cash mostly on the sidelines or having it mostly in risky growth stocks or crypto does not afford you much peace of mind.

Whether it is rational or not, the asset classes (stocks, bonds, real estate, commodities, etc) obviously all go up or neutral much more than they go down. You have to play the probabilities for the long term. Yes, gold keeps your money safer, but it's not very accessible and you really limit upside (hence why many people and many banks and hedge funds limit their holdings of gold until it is really becoming a confirmed bear market).

If you want to play it defensive right now or any other time, maybe consider bonds, REITs, or dividend value investing (drops in share price isn't a big deal unless it persists a long time or they lower dividend). If you buy shares in McDonalds or Annaly Capital REIT or 30yr US Treasury bond, they will absolutely not be wiped out completely no matter what the market does. You will find that it is nice to get those big monthly or quarterly chunks of dividend cash into your account...

https://www.financialsamurai.com/cd-investment-alternatives-why-im-no-longer-investing-in-cds/

...personally, I understand your overall view since I'm also bearish on stocks right now (esp down on USA market, emerging I feel has more potential). However, just because something has gone up doesn't mean it can't go much higher, and just because it's down doesn't mean it can't drop lower. That's for sure. Anybody who says they know is just speculating.

I'm a bit younger, but at present, I'm roughly 50% bonds, 25% stocks, 5% commodities, 10% metals, and 10% real estate... anticipating to sell a lot of bonds and probably metals to buy stocks after a USA market correction (hopefully return to 25% of my portfolio in bonds and 60% or more in stocks/real estate). I guess you just have to do what makes sense to you, but 20% metals really makes your portfolio highly defensive and sand bags your growth... would be nice to be getting at least 4% on some of that money if you can? It's not that hard to do with limited risk... 3% should be very realistic (bonds or REITs or dividend Dow stocks can definitely do that). GL

 

I wouldn't buy anything for a 30 year term. I'd be too old to enjoy any gains.

 

Dont get me wrong, if metal spiked 75% or more due to whatever crisis.... it will be sold (depending on the market at the moment) and than converted back when normalisation occurs.

It won't be locked away for 30 years no matter what, I keep my eyes on the market to closely for that, but a 20% rise or drop would be ignored