This is why investors prefer to add gold to their portfolio, to protect against inflation. Most estimates suggest that investments in gold should represent only 5 to 10% of your portfolio and no more. This will ensure that your portfolio has room for other investments, such as investment funds, stocks, P2P loans, etc. Advising investors to take investing in gold seriously, Pankaj Mathpal, MD %26, CEO of Optima Money Managers, said: During asset allocation in portfolio management, it has been discovered that people view exposure to equities and debt based on their appetite for risk, while ignoring gold, which is incorrect.
He advised investors to adopt gold as an investment option and to also allocate it appropriately in their portfolio. Limit gold investments to 5-10% of your portfolio. This generally agreed amount helps mitigate riskier investments without relying too heavily on it. Many experts will tell you that you should keep your investment in gold limited to between 10 and 15% of your total portfolio.
But this may not make more sense to you because everyone has specific goals that they are trying to achieve. Some experts recommend investing in more gold, and recommend that up to 65% of your portfolio be in gold. Therefore, investing in gold works as a good hedge against currency volatility and inflation, since rising inflation rates usually cause gold prices to rise. When asked about the return that can be expected from investing in gold in the long term, Pankaj Mathpal, of Optima Money Managers, said: In the long term, gold outperforms the return of debt funds and, if you continue to invest in gold for 15 years or more, you can expect to see growth of at least double digits after 15 or more years of investment.
If you plan to invest in gold because of its scarcity and the estimated increase in value once everything has been extracted, keep in mind that gold mining is expected to be unsustainable by 2050. Learn About Gold is a great source to learn more about adding gold to your investment portfolio. If you think so, like many other investors, it would be wise to consider allocating an even larger portion of your total portfolio to gold securities and other gold-related investments, including ingots, coins and rounds within an IRA account. One of the main reasons why people recommend investing in gold is due to historical trends that indicate that the price of gold rises during inflation.
Some believe that if the United States adopted a gold standard, it would benefit from its gold reserves. Pankaj Mathpal also said that if an investor's appetite for risk is low, then he should maintain exposure to gold at 15 percent, while in the case of a high risk appetite, he should allocate 10 percent of the portfolio to gold and assign the remaining 5 percent to stocks, since stocks offer a return of around 15 percent after 15 or more years of time horizon. For people who want to invest in gold but don't want to have the physical metal, they can invest in an exchange-traded fund or ETF. If you believe that the economy is going down and that public debt is rising, inflation rates and that the Indian rupee is losing value will eventually cause financial chaos, you may be tempted to allocate up to half of your portfolio to gold and gold-related securities.
Vinit Khandare, from MyFundBazaar, added that gold, which has existed for centuries, has seen an upturn (from physical gold in the form of jewelry, coins and ingots to digital gold in the form of funds and ETFs based on gods), being the preferred asset class for investors. On the amount of exposure to gold one should have in one's portfolio, Vinit Khandare, CEO and founder of MyFundBazaar, said: Allocating 10 to 15% of a person's portfolio to gold is inversely correlated with the stock market, whether investment in gold ETFs falters through a systematic investment plan or an SIP. .