5 Easy Steps to Building a Precious Metals Portfolio

5 Easy Steps to Start Building a Precious Metals Portfolio


Written by John Rothans

Jul 17, 2020

You’ve likely heard that gold prices are climbing and silver prices are keeping pace with gold. The price of gold has held above the $1,800/oz. mark, and the price of silver rose to its highest level in nearly three years on Monday, July 13, 2020.

Does this mean you’re missing out on a potential opportunity to grow your own wealth? You might be, especially if you haven’t established a personal precious metals portfolio. The good news is that you can get started today. We’ll show you how.

1. Do Your Homework

If you’re new to precious metals, your best bet is to educate yourself about them. Even if you do own precious metals, it never hurts to brush up on your knowledge.

Here are four of the things you’ll want to familiarize yourself with:

  • Types of precious metals. The four major types of precious metals are gold, silver, platinum, and palladium. Gold and silver are the two most common metals typically incorporated in a precious metals portfolio.
  • Prices of precious metals. The prices of precious metals vary from day to day. Nowadays, palladium is the most expensive precious metal, and silver is the least expensive. Gold and platinum prices fall in the middle.
  • Forms of precious metals. The physical forms of precious metals—metals you can hold in your hand—are typically bullion coins and bullion bars. For instance, gold and silver bullion usually refers to metals that are classified as at least 99.5% pure. Select bullion coins are an exception to this purity guideline, including Gold American Eagles.
  • Ways to buy precious metals. There are a few methods to purchase precious metals. First, you can buy them through reputable companies. Second, you can purchase precious metals through financial products such as a gold ETF or a precious metals IRA. If you purchase precious metals through a financial product, you won’t have physical possession of them. An alternative to these is purchasing digital gold currency. Digital gold is electronic money that’s backed by physical gold.

2. Get Some Guidance

Even if you’re familiar with precious metals, it’s smart to seek out someone who is more experienced before you make a buying decision. This person could be a trusted relative, a financial adviser, or a representative of U.S. Money Reserve. The best choices when buying precious metals are informed choices. You want to arm yourself with the best knowledge you can before pulling the trigger on a purchase.

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3. Choose Your Products

Once you’ve educated yourself and consulted with a knowledgeable source, it’s time to select your precious metal products. If you’re new to precious metals, you might want to start with a 1/10-oz. gold or silver coin. This way, you can get a sense of what the buying process is like.

Once you’ve gotten your footing, consider graduating to precious metals that weigh more and different types of precious metals products, like graded and certified coins. Also, consider diversifying your portfolio with a variety of precious metals.

If you prefer not to hold physical precious metals in your home, then you might explore a financial product such as a Precious Metals IRA. This type of savings vehicle lets you own precious metals without actually having them in your possession. However, you still can enjoy the safe-haven, inflation-fighting benefits of precious metals.

How much of your portfolio should be in precious metals? To maintain a well-rounded portfolio, experts recommend allocating roughly 5 to 25% of your portfolio toward precious metals.

“Silver and gold belong in every balanced portfolio. There’s no magic percentage of silver and gold you should include,” GuruFocus.com advises. “Adjust your position in silver and gold according to your goals, your age, and the size of your savings.”

4. Find a Storage Spot

When you own physical precious metals like gold and silver, you want to make sure they’re kept in a safe place. In other words, stashing gold coins under your mattress probably isn’t the best move. Instead, look into storing your precious metals in a safe deposit box, an at-home safe, or a designated depository (also called a storage vault).

Be sure to check insurance coverage for your precious metals before selecting where they’re stored. Your homeowners insurance policy may not cover precious metals or may only cover a portion of their value.

5. Monitor the Markets

Once you’ve purchased precious metals in some form or another, you’ll want to keep on top of market conditions so you can make further purchases at the right time. To stay informed, sign up for email alerts from U.S. Money Reserve and track U.S. Money Reserve’s price charts. These five tools that can also help you track gold prices. Each one provides a useful way to watch gold’s market moves more closely.


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