How much gold to keep in portfolio in 2024?
How much gold to keep in portfolio?
Gold has been cherished not only for its ornamental appeal but also for its intrinsic value for ages. As an investment bet - and a popular safety net against inflation, the yellow metal has stood the test of time, offering stability and security to investors across the globe.
With its unparalleled stability, historical significance, diversification benefits, and global demand, the precious metal stands out as a unique and compelling investment bet for investors looking to fortify their portfolios.
But can you have gold - and only gold - in your portfolio and grow richer?
What makes gold precious?
Gold carries a number of unique properties that make it stand out among asset classes, revered for its intrinsic value and timeless allure. Its ability to retain value even in times of financial uncertainty and market volatility makes it unique as an investment bet and as a shield against inflation.
How does gold remain popular amid economic uncertainties?
Investors turn to gold as a hedge against inflation and currency fluctuations, providing a sense of stability amidst turbulent financial landscapes. This is primarily why it serves as the ultimate safety bet against financial uncertainty.
Gold, a symbol of wealth and more...
Throughout history, gold has been a symbol of wealth, power, and prestige.
Its enduring appeal transcends generations and cultures, making it a timeless investment choice with a rich legacy that adds to its allure.
Gold's universal appeal makes it unique
It is the universal appeal of gold that ensures it receives consistent demand across geographies and sectors.
It is one of the aspects that cement its status as a sought-after investment option.
Diversification benefit
Many financial planners believe that including gold in a diversified investment portfolio can help reduce overall risk exposure and enhance long-term returns.
Its low correlation with traditional assets makes it a valuable addition that can enhance portfolio resilience, some add.
However, there's a catch.
No one becomes rich by investing in gold, people buy gold after becoming rich: Basant Maheshwari
Several money managers have time and again emphasised the importance of allocating only a small portion of an overall investment portfolio to gold, and using this allocation only for hedging purposes.
In the words of market veteran Basant Maheshwari: "No one becomes rich by investing in gold... People buy gold after becoming rich." Read more on this | Watch
Now, how much gold to keep in portfolio?
"It's advisable to allocate 10-15 per cent of one's portfolio towards gold and silver to hedge against economic or geopolitical uncertainties and for better risk-adjusted returns," says Sugandha Sachdeva, Founder of SS WealthStreet.
Is this strategy valid for 2024 as well?
"Given the lingering geopolitical risks and potential economic slowdown, increasing the allocation to 20 per cent for the year could be prudent," adds Sachdeva. Read more on how to invest in gold & silver in 2024
How does gold work as a hedge against inflation, economic uncertainty?
Gold is often considered a hedge against economic uncertainty, inflation, and currency fluctuations. It is because the yellow metal has been recognised for centuries as a store of value. Unlike fiat currencies, which can be printed or devalued by central banks, the supply of gold is relatively stable and limited. This inherent scarcity helps preserve its purchasing power over time, making it resilient during periods of inflation.
Wealth planners commonly recommend allocating a modest portion of an investment portfolio to gold
The exact allocation to a portfolio should be set keeping in mind individual circumstances, financial goals and market conditions, say wealth planners.
Including gold in a diversified investment portfolio can help reduce overall risk exposure and enhance long-term returns, they add.