Investing in gold has gained steam again in recent years. It’s no surprise that investors are once again turning to the yellow metal as a hedge against uncertainty in the markets. Historically, the price of gold has increased over long periods of time, but how much should you invest in gold if it’s part of your investment portfolio?

The basics

When you invest in gold, you own a share of a specific amount of the total gold supply. The total amount of gold that exists today is about 12,000 metric tons, but the market value of that amount is much less than its total supply. This is because only a tiny fraction of the total amount of gold that exists today is available for trading purposes. In other words, the price of gold is much higher than the total supply of gold would suggest given that only a small percentage of gold is actually available for trading purposes.

How to invest in gold

Investing in gold is a lot like investing in any other asset. You can invest in gold directly by purchasing bullion or through a gold exchange-traded fund (ETF), which is an investment fund that tracks the performance of gold. The benefit of investing in gold through an ETF is that the fees are typically lower than for directly purchasing bullion.Another option is to invest in mining stocks, which are shares in publicly traded companies that specialize in mining. There are several different types of mining stocks that you can research, depending on the type of company that you’re interested in. The key difference between gold and mining stocks is that gold is a store of value while mining stocks are a form of commodity. If you’re interested in investing in mining stocks, you should research which types are currently outperforming the market.

How much should you invest in gold?

The best way to determine how much you should invest in gold is to look at the ratio between the cost and the expected return. The expected return of gold is about 3-6% per year for the next 10 years, so you can create a rough estimate of how much you should invest based on that information. The cost of gold is currently about $1,200 per ounce, so if you want to invest $50,000 in gold stocks, you should invest about $61,000. If you want to invest in gold bullion, you should invest about $62,000, which is the same amount as the cost of gold.

Should you go all-in on gold?

Investing in gold is a great way to diversify your portfolio, but you shouldn’t go all-in on gold. You should invest about 20% of your portfolio in gold, but you should never put more than 40% of your portfolio in any one financial asset. You should also never invest more than 10% of your portfolio in gold if you’re currently investing in stocks.

When to buy gold?

One way to invest in gold is by taking advantage of the December holiday season. Many people buy gifts, decorations, and cards for the holidays, but they might also consider investing in a few gold bars or coins. You can buy gold on a regular basis, or you can wait for the holiday season to buy cheaper gold.If you’re worried about a major economic crisis, you can start investing in gold during the next few months. This is because gold prices tend to increase during times of uncertainty. If you’re worried about the future of the economy, you can start investing in gold now to lock in the current price and avoid paying more later.

Bottom line

Investing in gold is a great way to diversify your portfolio and protect your assets against market volatility. However, you shouldn’t go all-in on gold. You should invest 20% of your portfolio in gold, but you shouldn’t put more than 40% of your portfolio in any one financial asset (such as gold). If you’re worried about the future of the economy, you can start investing in gold now to lock in the current price and avoid paying more later.