What percentage of your portfolio is in metals?

[SlyGuy]

The question is as simple as it sounds: what percentage of your portfolio is in precious metals?
This is your investment portfolio, not your total net worth... so don't factor in debt or the value of your primary residence (but net equity in rental or farm properties, etc would count).
This is simply the estimated portion of your invested monies which is held in gold, silver, or other metals. The recommendation on this seems to vary widely from 0-10%, and it seems I read 3-5% most commonly. Obviously, the precious metals gurus and sellers advocate for even higher amounts (even "all in," lol). I would imagine the people on a precious metals site are higher than the average, but we shall see.

...If you want to explain your personal strategy or goals and maybe state your approximate age, that would be good too. It is obviously most common to have mainly growth portfolio early in life and then shift to more fixed income and wealth preservation as we get closer to retirement.

I can start: roughly age 40yrs...

10% metals (about three quarters of that gold, the rest silver... all physical)
50% equities (stocks and indexes... mix of USA/international and small/large companies)
15% bonds (this was higher in the past... but now mostly in large dividend stocks due to low bond rates)
15% real estate (dividend paying REITs and mortgage companies)
10% cash savings

...I plan to keep the metals stable at 5-10% of my portfolio (lower end when I expect a bull stock market, more metals when I anticipate a bear market and gold price jump coming). Eventually, I would like to have even more of it in metals once I retire, but for now, I need the growth potential and dividend factor. Especially if gold hasn't spiked in many years, I will consider increasing metals to 15 or 20% of my portfolio in gold once I get to the point where I feel I can live off 5% annual gains from the other 80 or 85% of the portfolio. That goal for me would be roughly $5mil USD in total... a far ways off, but that would be $0.75mil to 1mil in gold and $4mil value held in other investments (which should easily generate average of 5% annually after taxes, so roughly $200k USD net per year for me to live on). One can hope, haha

 

[Ipv6Ready]

Three years ago I would have been 95% investment properties and 5% stocks, which I have sold down and moved into stocks.

Now I have
15% Gold, from less than 1% two months ago, have some silver but not worth mentioning
10% Stocks down from 95% (the 10% I have now are mostly what i consider gambling stocks ie not blue chip)
75% Cash deposited into various banks to qualify for bank deposit guarantee

 

[sgbuyer]

10% gold (up from 5% a month ago), 10% silver (bought at the recent top), 3% stocks, 3% bonds, and the reminder cash in term deposits (mix of usd and sgd). Intend to convert more sgd into gold/silver.

As a newbie, I made a mistake of buying bulky 100 oz bars which I will probably sell once I can get back my May/June costs, so I will be overloading on 10 oz silver bars/kilo coins if the opportunity presents.

 

[Silverling]

I'm retired and will not go back to work anymore. So for me safety is paramount. I should point out that bank cash accounts in Australia will pay about 2.8% interest and we have a government guarantee of up to 250k per account. You can have as many accounts as you like.

1% Precious Metals
10% High Dividend paying stocks
89% Cash, term deposits and other interest bearing securities

I only have about 1% in precious metals only because I don't really think that will be the saviour when the SHTF. I am more hobbyist with gold and silver. In my opinion it's better to be safe and cashed up for when it all goes down (if ever). If you survived the 1987 stock market crash and the 55% decline during the GFC then you probably already know how it will go. Cash is king during a crisis, buying shares and real state at half price (if it ever happens again) is what could happen, be ready and prepared for it. But I have learnt from the past, what you think might happen probably won't so we are all second guessing anyway.

 

[dozerz]

true cash is king because of liquidity but its depreciating faster than the interest you are earning. shirley its better held in another form of asset that is at least depreciating slower than inflation?

 

[bennybbc]

No me mate! Just running the percentages

 

[Silverling]

true cash is king because of liquidity but its depreciating faster than the interest you are earning. shirley its better held in another form of asset that is at least depreciating slower than inflation?

You are right but I am not always this conservative. Considering that the DOW has quadrupled since the GFC and we have not reached our previous high since 11 years ago I just think the US market is in for a correction. So basically I pulled out of all overseas markets and just kept a little bit in our local market for the dividends and imputation credit refunds. If the market corrected 20% + or more I would buy back in at much lower prices.

 

[Silverling]

Nah, a long time ago when I was getting into investing a financial adviser once said to this newbie with a couple of grand to invest:

"The only difference between a rich investor and a poor investor is amount of zeros behind the first number. The principle behind the investment is still the same"

 

[Ipv6Ready]

Australia will pay about 2.8% interest and we have a government guarantee of up to 250k per account. You can have as many accounts as you like.

Are you sure on this? I thought $250k guarantee was per licence holding institution.

1. 2 x $250k in two separate banking accounts of the same bank will mean only $250k is guaranteed

2. Even if separate banks, as some banks have relinquished its license on takeover or merger, so only $250k deposit is guaranteed even if the banks are different. Ie only $250k is Government guaranteed even if you had separate deposits of $250k in Westpac and St George bank. (Westpac owns St George)

 

[Silverling]

What I meant was that 250K is government guaranteed per account per person with different banks. So you can open one with ANZ, NAB, ING, CITIBANK, etc and each are different Approved deposit institutions (ADI's) attracting the 250K guarrantee. You will run out $$$ before you run out of banks and credit unions to put your money in and if you have a wife you can double up under separate names. You are correct about only 250K per bank, sorry about the confusion. Here is more from the Governments own website:

https://www.moneysmart.gov.au/managing-your-money/banking

The Australian Government has guaranteed deposits up to $250,000 in Authorised Deposit-taking Institutions (ADIs) such as your bank, building society or credit union. This means that this money is guaranteed if anything happens to the ADI.

The cap applies per person and per ADI. So if you have $250,000 with one ADI and $250,000 with another, then both of your deposits are guaranteed. If you have more than $250,000 with one ADI then only up to $250,000 is guaranteed.

Some ADIs operate multiple brands or may offer deposit accounts under more than one brand name. However, they are still part of the same ADI. The guarantee covers deposits per ADI, not per brand name. For example, if you have multiple deposit accounts with brands that are owned by the same ADI, the guarantee will only apply to $250,000 of these funds in total. If this concerns you, make sure you know who the ADI is that you bank with.

In the case of joint accounts, each account holder is entitled to an individual guarantee up to $250,000.

 

[SlyGuy]

..."The only difference between a rich investor and a poor investor is amount of zeros behind the first number. The principle behind the investment is still the same"

Yep, I agree fully.
The only thing that really hurts when you are just starting out is the transaction fees... $10 trade fee is much less of a factor when trading $5000 in stock than a new investor trying to buy $500 worth of shares. That made it pretty hard for me to diversify in the early going. Also, banks usually give you better interest rates and free trades etc once you have a decent amount in accounts with them, so that obviously helps the rich get a bit richer.

...bank cash accounts in Australia will pay about 2.8% interest and we have a government guarantee of up to 250k per account. You can have as many accounts as you like...

Ah, we are lucky to get half of that interest rate on savings accounts in USA right now. But yes, the USA has the same insurance concept, Federal Deposit Insurance Corporation (FDIC), for $250k USD per account. The funny thing is that their FDIC fund usually has less than 1% or 2% of all the account deposits which they insure, though. The rest of the liability to pay the bank customers in the event of bank failure is supposedly to be paid for by the banks themselves. So, that seems like fuzzy logic to say the least. It seems that would work for small isolated bank insolvency, but if many banks or even a single one of the major ones went under, the plan probably wouldn't work at all. Other banks would not or could not pay for their competitors failing (and they'd likely be on very shaky financial ground at the same time others had failed).

I think the most likely scenario in the event of many USA bank failures would be more bail-outs (like 2008) where money is printed for the banks, or if they let the banks fail, then people would be given newly printed money by the FDIC (so there would be significant inflation and the money wouldn't buy as much). I guess inflation money is better than losing everything, lol. Who knows, though... I realize it could happen, but I don't plan or allocate for days ever being that rainy.

...Cash is king during a crisis, buying shares and real state at half price (if it ever happens again) is what could happen, be ready and prepared for it...

Absolutely. Stocks and bonds are pretty liquid, but you don't want to be forced to sell at a bad time. Therefore, cash is always nice to have available in case a stock or a whole market dips. That is what I use my cash for: grabbing a stock or two that I've been watching which drops drastically for no good reason... then replacing the cash by selling a different asset soon afterward. The cash allows me to avoid having to make rash sell decisions that I would if I was 100% invested

I should probably increase my cash percentage, but it is hard to do when savings interest rates are so low. I consider bonds and the large Dow dividend stocks as quasi-cash that I could liquidate if a real good buy came up. I guess the next bear market will teach me if that proves to be a mistake. Haha

 

[SilverDJ]

I'm currently have most of my cash in unallocated metals, except in my SMSF were it is still cash. I think it's about 20-% metals or so now.
Not buying any more stocks or property at present, in a wait and see holding pattern for the property and stocks corrections. So just funneling most excess cash each month into metals just in case metals take off in any financial crisis. I don't expect metals to go to the moon, but will surely be a bit better than cash when the market drops.

 

[JNS]

At my age early 40s, 10-20% metal is good, cash enough for 6 months as idle, earning in small biz and while still working for rainy days.
Much important for me is extra cash to buy, sell and trade of many kinds.

 

[sgbuyer]

Ah, we are lucky to get half of that interest rate on savings accounts in USA right now. But yes, the USA has the same insurance concept, Federal Deposit Insurance Corporation (FDIC), for $250k USD per account. The funny thing is that their FDIC fund usually has less than 1% or 2% of all the account deposits which they insure, though. The rest of the liability to pay the bank customers in the event of bank failure is supposedly to be paid for by the banks themselves. So, that seems like fuzzy logic to say the least. It seems that would work for small isolated bank insolvency, but if many banks or even a single one of the major ones went under, the plan probably wouldn't work at all. Other banks would not or could not pay for their competitors failing (and they'd likely be on very shaky financial ground at the same time others had failed).

There's a similar bank deposit insurance concept in Singapore and only for a pittance S$75,000 (USD 54k). In my opinion the insurance just for show considering that probably 80% of the cash in Singapore are foreign money since Singapore is a financial centre/tax haven.

In the event of a severe financial crisis, I see the possibility of capital controls, banks limiting what you can withdraw. If you can't withdraw, there can't be a bank run.

Therefore, cash is always nice to have available in case a stock or a whole market dips. That is what I use my cash for: grabbing a stock or two that I've been watching which drops drastically for no good reason... then replacing the cash by selling a different asset soon afterward. The cash allows me to avoid having to make rash sell decisions that I would if I was 100% invested

I would have more cash if I were you. I think many in the West have underestimated the financial bubble in China due to lack of information and state controlled media. The same case in Singapore, a lot of information you see on Bloomberg and CNBC are funded propaganda. Likewise, the issues with the US and dollar is also exaggerated due to "uncontrolled" media.

 

[sgbuyer]

10% gold (up from 5% a month ago), 10% silver (bought at the recent top), 3% stocks, 3% bonds, and the reminder cash in term deposits (mix of usd and sgd). Intend to convert more sgd into gold/silver.

As a newbie, I made a mistake of buying bulky 100 oz bars which I will probably sell once I can get back my May/June costs, so I will be overloading on 10 oz silver bars/kilo coins if the opportunity presents.

I even out my gold/silver holdings in October. Had I delayed it till now, it will be a big problem. Lesson is to be disciplined enough to maintain the ratio as closely as possible.

 

[Shaddam IV]

I have no trust in the deposit insurance scheme in Australia. I’ve no doubt that if an event big enough to trigger mass claims occurs .gov will pay it out with some kind of nearly worthless bonds.

Sorry for getting off- topic.

 

[Ipv6Ready]

So happy I basically moved all my assets into cash.
Though I did sell my properties two years to early, but I’m about even on that play.

 

[sgbuyer]

So happy I basically moved all my assets into cash.

Good for you, I haven't sold all my stocks. Kept an oil stock thinking oil prices will sustain because of Iranian sanctions. Now the price has fallen by a third in just 1-2 months. Waiting for a rebound.

Though I did sell my properties two years to early, but I’m about even on that play.

Trying to time an exit right at the top is difficult, just like trying to buy the bottom is difficult - referring to gold and silver.

 

[whay]

If you count metals as 'investments' - you are doing it wrong.

 

[sgbuyer]

If you count metals as 'investments' - you are doing it wrong.

Depends on the timeframe.

I bought a 1oz maple leaf in 1998-2001 period. Had to pay GST on it. To me, it's not an investment because I lose like 10% (GST + spread) on the day I bought it. Hence, I consider it a novelty buy then. Investment for me was penny stocks. At that time it wasn't possible (or I didn't know how to) to buy silver bullion in Singapore.