Gold is an essential part of any investing portfolio. But, of course, going the route of picking just one of the ways to invest in gold is a little foolish and helps no one — the ancient proverb of “don’t put all your eggs in one basket” is still true.
So how should you manage your gold portfolio? That depends mostly on your investing strategies elsewhere that you adhere to, especially your views on speculation. I’m not a huge fan of speculation, and I’m a fan of dividends — those combine to provide the following portfolio:
- Gold Stocks. Roughly 75% of my gold portfolio is in gold mining stocks. The reasoning for this is pretty simple: you get dividends back. This means if you have a couple of million dollars in gold mining stocks, you get a nice full-time income from the gold dividend stocks alone — that’s a full fledged gold retirement.
- Gold Coins. I put roughly 25% of my gold portfolio in gold bullion coins. The reasoning for this is pretty simple: gold coins are physical. I can physically store them, hold them, hide them, spend them, hoard them — they’re real. They’re not just pieces of papers. They’re real gold. Honestly, the main reason to invest in gold coins for me is if there’s a systematic economic collapse, and having hard assets you can touch becomes necessary. Call me paranoid, but if things come tumbling down, I’m going to be sitting just fine.
- Gold ETF. I put roughly 0% of my gold portfolio in the gold ETF. The reasoning for this is pretty simple as well: I don’t trust gold ETFs. I explain this more in the main gold ETF article, but suffice it to say, there could be a lot of fraud when investing in the ETF, and it’s not even real. Gold ETFs are just weird. I’ll take mining stocks and gold coins over a precious metals ETF any day of the week.
In the end, investing in gold is as simple as buying gold coins and investing in gold mining stocks. That’s basically a two step process, and if you master it, you’ve mastered your investing, your retirement, and the whole shebang.
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Tags: gold coins, gold mining stocks, gold portfolio, invest in gold