Disclaimer: Many or all of the companies listed here may provide compensation to us. This is how we maintain our free service for consumers. Compensation, along with hours of in-depth editorial research, determines where & how companies appear below.
Owning gold can be a great way to diversify your portfolio and gain financial security. But how much gold should you own? There are many factors to consider, including your financial situation, the current gold price and the purpose for which you buy gold.
This article will discuss how many ounces of gold you should own and the different types of gold available to purchase. So, if you're looking to invest in gold and ensure your portfolio is well-rounded and secure, keep reading to find out how many oz of gold you should own.
If you are looking to get started investing in precious metals right away checkout our top companies list. We did hundreds of hours of research and testing to find the top companies for this year...
The Place of Gold in an Investment Portfolio
Before we discuss how many ounces of gold should be in a portfolio, it's important to understand why you want to own gold. There are many reasons for this, including its attractiveness as jewelry, the fact that it's pure and reliable and the fact that there is no market risk with gold. It is also considered a hedge against inflation and financial market instability.
Gold prices can fluctuate and go up or down over time, but they will typically increase. This makes gold a significant investment that can diversify your investment portfolio. And while we can't predict the future (no one can), it's safe to assume that precious metals like gold will retain value and never lose their purchasing power.
The idea here is that gold can give you a more secure form of wealth protection, which will protect your hard-earned money. If financial markets get volatile, you'll have the assurance that your wealth isn't in jeopardy, and you won't have to worry about losing purchasing power.
Factors to Consider When Deciding How Many oz of Gold to Own
The basis for how many ounces of gold you should own depends on your financial situation. If you are in a lower-income bracket with a heavy reliance on the job market and looking to maximize the return on investment, then you may need more than an investment in precious metals.
The reason is that most precious metals are self-preserving investments with little ability to adjust their value in the future based on inflation. Effectively, a low-income bracket person may have to save up a larger amount of money before they are able to afford gold, which decreases the amount of money they have available to spend on other expenses.
On the flip side, if you are wealthy with an excellent job market and minimal exposure to inflation, you can handle a larger investment in gold. This is because precious metals tend to work well as effective inflation hedges and can keep you from overheating your portfolio by letting you hold less cash and more precious metals.
Another factor determining how many oz of gold you should own is the current price. If the price of gold is lower than it has been in the past, then it would make sense to invest more than if the price of gold were higher. However, if the higher costs resulting from inflation cause you to be in a higher-income bracket and require fewer savings, purchasing more of your desired precious metals could be unwise.
In some cases, the price of gold may be less of a factor in how many ounces of gold you should own. This is because many people invest in gold (and other precious metals) for reasons other than its price or value. For example, precious metals are a good option for an investment with built-in security features such as saving you from inflation or keeping your portfolio well-rounded. By investing in gold, you may also be able to diversify your portfolio and decrease the overall "risk" involved.
Different Ways to Add Gold to Your Portfolio
There are a few different types of gold that you can purchase, each with its benefits and downsides. One important thing to note is that some options are for larger purchases (such as gold bullion), while others are for smaller purchases.
Here're the different ways to buy gold, from lowest (finest) to highest quality:
Bullion is gold in its purest form. This is gold that has come directly from a mine and is composed of 99.9% gold. It is often sold in bars or ingots. 1 oz bullion bars are the most common form of bullion, but you can also find half-ounce, quarter-ounce and even tenth-ounce bullion bars. These can be very cheap to purchase, depending on the current price of gold, but they could be better for jewelry or used as a hedge against economic turmoil (they are difficult to divide up).
These coins have been made a collector's item for the coin's intrinsic value (and not simply as a play on the gold price). Here you can find smaller coins like quarters and dimes. In addition to these common forms of gold coins, you can find more exotic types of gold coins as well, including those made out of silver or copper.
Benefits of Buying Gold Coins
The main benefit of buying gold coins is that it's a physical investment. This means that the value of gold will stay the same during your lifetime, which can be comforting if you have no way to store your assets. For example, suppose inflation rises faster than your income and causes others to hold more cash than expected due to increased purchasing power. In that case, you may pay more for everything from groceries to gas. However, this would not be a concern if you were buying coins and could quickly sell them for the same price as before.
The other benefit of buying gold coins is that it's a good option if you have a higher income bracket and can afford to invest in more of your desired asset. The reason this is true is that gold coins have an intrinsic value associated with them.
In the case of gold, this intrinsic value refers to the cost of creating and refining it into the minted form. With the additional inherent value, gold coins are generally worth more than their weight in gold, making them a better investment if you can afford it and want to invest in many of your desired assets.
Bars are pure gold that has been melted down in a process called "pouring. This process requires cutting the bars (usually into pieces) and pouring them into a mold to extract their purity. In the pouring process, you won't have any inclusions, including any remaining traces of silver or copper. These bars are also cheaper than gold coins and have a similar buying power to bullion. Gold bars come in 1-ounce, 5-ounce, 10-ounce and even 25-ounce sizes.
Benefits of Buying Gold Bars
Gold bars have several advantages that make them attractive for investment as well. The main benefit is that you can decide how much gold you want to buy based on what you can afford and how much security you want for your portfolio.
For example, if you have a lower income bracket and want to invest in a lot of gold, you may spend less money on gold bars than if you were investing in coins. This is because bars are typically sold in smaller quantities than coins and thus require less money to purchase.
Another benefit of buying gold bars is that they can often be stored more easily than coins. This is true because the larger size makes it easier to keep track of your bars and can make them easier to transport as well. However, this does depend on their size, the laws of your area regarding transporting gold and the security features of your particular bars.
How Much oz of Gold Should I Buy and How Often
Nowadays, people are more aware of the dangers of keeping their wealth in dollars or dollar-denominated assets. Every major central bank in the world is involved in a massive counterfeiting scheme, producing vast amounts of new currency at rates never previously seen or imagined.
While most people need to learn what's wrong with the economy or how to fix it, they realize that printing more money hasn't helped (and has created new ones). Further printing will only serve to devalue currency already in circulation. People are scrambling to secure their financial futures as the likelihood of an economic crash rises.
Alternative assets are sought as money loses its value-storing function. The greater the lack of faith in government-issued currency, the more desirable and valuable these alternative assets become. As people lose faith in a given financial system, the value of alternative value stores rises in comparison. Although these factors certainly shed light on the recent resurgence of interest in gold, silver and other "hard" assets, they do not suggest a specific allocation of one's holdings toward inflation hedges.
The amount of oz of gold you should own will depend on your risk tolerance, investment horizo and other factors. A younger investor with a longer time horizon may afford to take more risks than their more conservative elder counterparts. The same is true for a higher net-worth individual compared to a limited investment portfolio.
Concerning the specific allocation of your gold and silver holdings, consider the following rule of thumb: at most 10% of your overall portfolio should be placed in precious metals. Investing beyond this amount may carry too much risk for some investors, mainly if you still depend on your portfolio to finance retirement income.
Note that this maximum allocation represents the upper limit of gold and silver holdings. In other words, you can allocate less than 10% of your portfolio toward precious metals if you choose. The specific number is up to you, but it's important to remember that every investment – whether it's hard assets or paper assets – carries some amount of risk. The key is managing that risk effectively to avoid jeopardizing your overall financial health.
Another option to consider is the creation of a separate portfolio specifically for your precious metals holdings. By keeping them in their portfolio, you can better track your gold and silver performance and growth. It also allows you to take specific action or allocate funds toward these assets when they are out of favor or underperforming.
If you invest in gold and silver as an inflation hedge, one approach is to hold them in their physical form as a long-term store of wealth. Experts recommend holding at least 10% of your portfolio in physical metals to protect against future inflation. If you expect a short- or medium-term spike in inflation, you should hold around 5%.
A self-directed IRA is an effective way to invest in gold and silver assets without the added costs, red tape and time associated with acquiring precious metals through an exchange. This method requires investing your assets into an IRA account that allows you to purchase gold and silver bullion.
Precious Metal Companies to Help You with Gold IRA Investment
Several precious metal companies allow you to hold precious metals in a self-directed IRA. Precious metals are valuable tools that can help you to achieve your financial goals. If you are uncertain about choosing the right type of precious metal to invest in, these firms can assist you with your inquiries and get you on the road toward investing wisely and safely.
Goldco is a well-known and trustworthy firm that advises clients on how to best invest in gold and other precious metals. Many options are available, such as IRA rollovers, direct purchases and gold-backed retirement funds. In addition to selling precious metals, they also educate and advise consumers on money matters to help them make the most of their investments.
Gold, silver and platinum coins and bars are just some of the many goods available from Goldco. Easily hedge against inflation and market fluctuations with Goldco help. You can trust Goldco with your investment since they are dedicated to providing you with the best service possible, and a safe and secure way to conduct business.
If you are interested in investing in precious metals, Augusta Precious Metals is a reliable firm to work with. They've been in the business of satisfying consumers for quite some time now. They supply precious metals in several formats, such as coins, bars, rounds and jewelry. They also provide Individual Retirement Accounts (IRAs) for those who choose a tax-free environment to save valuables.
Among Augusta Precious Metals' many offerings, there is bound to be one that satisfies your every requirement. Furthermore, they have reasonable prices, with volume discounts for even greater savings. Augusta Precious Metals is BBB-accredited, demonstrating its dedication to the happiness of its customers.
If you're in the market for shiny new jewelry or a cost-effective solution to diversify your portfolio with precious metals, go no further than Augusta Precious Metals.
Also, a BBB-accredited business, American Hartford Gold is an established firm that delivers the latest in gold and silver investment strategies. They provide a convenient way to invest in precious metals by offering secure online ordering capabilities. The website's design is attractive and easy to use.
Their assistance lets you buy gold and silver in your choice of coin or bar format. In addition to their expertise, they have a secure storage facility where your precious metals are kept safe until you choose to sell them for the best value.
#4. Birch Gold Group
Birch Gold Group has been an established precious metals brokerage firm since 2003. They have a reputation for providing honest, efficient service at reasonable prices. If you're an investor, they have the resources and experience to guide you through the maze of proper precious metals investment.
In addition to the convenience of their convenient website design, Birch Gold Group offers secure storage facilities for those who want to avoid losing their valuables during business or transaction hours. They can also help you find great deals on precious metals.
Birch Gold Group ensures the satisfaction of its customers by maintaining a high level of customer service. They are proud to be an accredited member of the BBB and NSCC and a proud member of the National Association of Active Investment Managers.
#5. Noble Gold
If you're looking to invest in gold or other precious metals, Noble Gold is a dependable company. They provide a wide range of services to clients all over the globe and are experts in the field of precious metals. They are a certified and insured precious metals dealer that offers safe storage options at their vault.
Customers can rely on Noble Gold's seasoned experts to help them make educated investment selections based on all the information available. In addition, they provide a wide variety of tools, such as daily market updates, financial advice and thorough instructional materials, to assist clients in making the most informed decisions possible regarding their precious metal investments. Noble gold is an easy way to diversify your holdings, protect your wealth from inflation or both.
The quantity of oz of gold to own depends on several factors. You can own more gold than you need, but if you are not confident about what you are doing, it is better to start with a smaller amount. A self-directed IRA is the best way to do it if you're looking to invest in gold or silver. With the assistance of a reputable precious metals company, you can reap all the benefits your IRA account offers while enjoying all the advantages of buying gold and silver bullion.