![]() However, gold bullion held for less than one year is taxed as regular income. If held for longer than one year, you can expect a capital gains tax of 28% on whatever net gain you yield from the bullion sale. The downside, however, is that bullion is taxed as a collectible. Can be purchased in large or small dollar amount.Physical gold bullion and exchange-traded funds (ETFs) are purchased differently, so it’s best that you first familiarize yourself with these two asset variations. How you buy depends on the type of asset you’re interested in. If this is your first time in the market, you’re probably wondering how to buy precious metals. Notably, Kevin O’Leary of ABC’s Shark Tank allocates roughly 5% of his portfolio to gold. However, investing too little in gold and silver leaves you exposed to risks that other assets cannot remedy. Too large an asset allocation (15% or higher) dedicated to precious metals might cause you to miss out on the higher returns offered by other asset classes. ![]() We generally advise our clients that 5% to 15% of their portfolio should be dedicated to precious metals. The share of your portfolio that you dedicate to precious metals will depend on your sensitivity to risk. What Asset Allocation Should You Reserve For Gold And Silver? Investing in precious metals ETFs can provide much-needed cash flows during times of market downturn and slowdowns in your business cycle - plus, gold and silver are strategic long-term holds that can preserve your wealth in the event that your business has to close its doors. The startup world is highly volatile, and investing in precious metals is an excellent risk management tool. This is especially true for entrepreneurs. Therefore, investing in precious metals can protect your wealth when you need it most. Rare commodities such as silver and gold hold their value comparatively well during times of economic decline or crisis, which makes them a hedge against traditional asset volatility. When consumer and investor confidence declines, I predict that the value of stocks and bonds will be the first to plummet. As Keynesian economists would have it, unprecedented growth is bound to be met with unprecedented economic contraction sooner than later. economy has been expanding for over 121 months and counting, which is the longest “boom” cycle in history. The economy fluctuates by experiencing periods of economic growth (“booms”) followed by economic stagnation or decline (“busts,” or recessions). Keynesian monetary policy - the economic paradigm that lawmakers and central bankers have maintained since the Great Depression - gives rise to a natural boom-and-bust cycle. Why Gold And Silver Are Worth Adding To Your Portfolio
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