Gold IRA Allocation Strategy

Wealth accumulation is the strategy of every investor. Individuals invest in stocks, real estate, commodities, debt instruments and foreign currencies to achieve their wealth accumulation objectives. There are different strategies that an individual adopts, depending on their risk appetite and investing position. Gold is an important commodity that is known to give high returns.There are several Gold IRA allocation strategies that you can adopt to get the maximum return from the precious metal. Portfolio management is extremely crucial for attaining the desired returns. Here are some Gold IRA allocation strategies that you can implement depending upon you investment plans:   

5% Gold Allocation for Aggressive Investors    

Investors who are aiming at realizing heavy gains through their investment should invest only 5% in a gold IRA. Gold is relatively secure investment instrument, offering decent returns over the long run. It also does not provide any yield to the investors. Stocks and gold perform differently. In the best market years, stocks can give investors higher returns in comparison to gold. Gold is less volatile than stocks and hence the return is also subdued. This is why an aggressive investor should invest only five percent in Gold IRA.    

10% Gold Allocation for Moderate Investor    

If you want moderate exposure to risk, you can invest 10% in gold allocation. This will result in a slightly higher overall return in case the stock market witnesses a downward movement in price trends. The scarcity of gold keeps on pushing the price of the precious metal in the upward direction.     Since the investment in a Gold IRA will be held for a long period of time, allocating 10% may result in slightly lower return than the 5% allocation. However, the risk exposure would be minimized and chances of wealth erosion will be subdued.    

25% Gold Allocation for Conservative Investor    

A conservative investor looks to invest in commodities that offer less volatility. Stock markets are known to be volatile and the price movements can change with the wind. This makes investing in stocks a risky move for conservative investors. Gold on the other hand offers relatively secure and guaranteed returns over stocks. Gold prices have currently increased by around 300% from price levels in 1995. Investing one-fourth of your corpus in gold will lead to a fixed earning owing to the secure nature of the metal. The remaining three-fourths of your corpus can be invested in other instruments to realize returns over and above the return from gold.

These are the Gold IRA allocation strategies that you might be following depending upon your risk appetite. You can formulate other allocation strategies on the basis of your individual goals. As usual, as always, ask your financial consultant to help you formulate a well-defined strategy.

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