PMs in your portfolio

[JayB]

This is something I think about in the early hours....no doubt caused by not enough wine.

 

As we get older, we must resign ourselves to the reality of retirement and pensions. Now, I'm sure this is something this forum thinks about a lot.

 

WE have thought of alternative, perhaps safer ways of protecting our wealth. 'J Bloggs' will rely on the state, 'A Silver Forum member' will plan ahead.

 

I read a lot. Opinion on diversification in savings (investments) is, well, diverse! The figures are wildly disparate...as little as 10% in PMs and as much as 80%!

 

What do you think is an advisable/satisfactory percentage of wealth in PMs? What target do you hope to achieve? 

 

I don't wish to pry. A percentage figure is enough, I'm not asking what your house in worth...just a figure. 

 

I'd suggest 10% is a good start?

[SilverPirate]

My percentage is very low a guesstimate is 0.5%.Most is in Pensions followed by ISA's.

[Danny-boy]

I'm at about 15-20%

[JayB]

Hi SilverPirate matey,  I'm surprised so little but at least you are thinking about it too. An ISA is a great idea

[JayB]

Danny, I guessed as much. You have a lot of Silver!

[Kman]

About 5% 

 

I'm not adverse to making that a bit higher, just waiting for the right deals to pop up where I know I could make an instant profit (even if I don't intend to sell them straight away)

[Danny-boy]

Danny, I guessed as much. You have a lot of Silver!

Not in comparison to many mate.

Need more, I'd like to be up at 25%.

Trouble is I'm smashing into my pension too, so that keeps the percentage down.

[JayB]

Yes, on reflection I'd like more than 10%. 

 

I hope Keithoil doesn't see this post!  

[Ares]

I'm probably on 30-40% but i've not got a whole lot of savings, that'll change soon.

 

Ideally i'd like to stay 10-20%. 

[JayB]

It's interesting, isn't it? The whole subject of diversity I mean. There is no magic formula

[Ares]

Its more about exactly how much you want and feel comfortable putting in.

[watchesandwhisky]

For personal reasons 100%, crazy i know but will be fixed one day.

[Cointreau]

At least 80% of my wealth is in pm's as I don't own a property.

I'm not messing about here.

Pensions and ISA'S? You a paper tiger.

[garthy]

I don't have a pension and I no longer have any isa's.

I hold cash and short term shares along with gold and silver, if I take the equity of my house out of the equation I'm about 40% in PM's which I'm more than happy with, I just don't trust paper long term.     

[Keithoil]

Yes, on reflection I'd like more than 10%. 

 

I hope Keithoil doesn't see this post!  

I have seen this!!!

[Keithoil]

Me.......Mmmmmmmmmmmmmmmmmmmmmmmm

 

Property is my biggest asset. Yes they are rented.

Then ISA's.

Then Silver.

Then Cash.

Then Shares.

Then Gold.

Then Pension.

Then Whisky.

[Fluttershy]

as part of my Portfolio, then I keep 50% of that in PMs.

when I say portfolio I take that to mean all money earning assets, and Not total worth.

and by 50% I mean that if I have a business with £2000 worth of assets, then I`ll also keep £2000 worth of metal holdings to match it.

 

effectively I use it as a hedge/insurance (that I hope I`ll never ever ever! need) and can then use it later for my pension subsidy, and hopefully I`ll have enough left over to pass on to my kids

 

again, with the usual caveat as mentioned by others above, I`m NOT a financial expert, i`m just doing what suits me, and lets me sleep well at night

[SilverPirate]

At least 80% of my wealth is in pm's as I don't own a property.

I'm not messing about here.

Pensions and ISA'S? You a paper tiger.

Black belt in Origami. 

[ChrisSilver]

Everyone has a different plan, and different assets suit different people, but personally for me: l I think it is best to have the majority in property (property you rent out) and then to invest this passive income into PMs. Some people like shares, but me personally I would only invest in early stage businesses, or my own business(s). Large companies that trade on the stock exchanges are too volatile and manipulated (in my opinion) for my liking.

PMs currently make up about 66% of my portfolio, but that is only because I don't have that many assets yet. Eventually the majority of my wealth will be in property, excluding any business(s) that I may own, it wouldn't bother me to hold up to 20% of my wealth in PMs.

Say for example you have only £1000 of assets, it doesn't really matter what form this is in as it's relatively a small amount. So you could invest 100% into PMs, or cash and it doesn't really make much difference.

Here is some examples of what happens when you have more money to play with. Say you start off with £1m in cash.

Option 1: Invest 20% into property earning 5% per annum. And 80% into PMs
Option 2. Invest 50% into property earning 5% per annum and 50% into PMs
Option 3 Invest 100% into property.

Option 1 and option 2 are silly in my opinion and here is why:

(Assuming you have other money to live off of and all income derived from rental property is invested into PMs, and assuming that the 5% is after all fees and taxes etc. Also assume that property value and PM value does not change over this time.)

Option 1 first year: 200k property, 800k PMs
Option 1 after 10 years: 200k property, 900k PMs
Option 1 after 20 years: 200k property, 1m PMs

Option 2 first year: 500k property, 500k PMs
Option 2 after 10 years: 500k property, 750k PMs
Option 2 after 20 years: 500k property, £1m PMs

Option 3 first year: £1m property, 0 PMs
Option 3 after 10 years: £1m property, £500k PMs
Option 3 after 20 years: £1m property, £1m PMs

Looking at the examples above, it is my opinion that incoming producing property is far superior to PMs. Imagine also if you invested some of your income back into property and not into PMs. Obviously these examples exclude a lot of variables, including a large increase in PM prices, which is very possible. But long term I think it is best to keep a lower percentage in PMs, as a sort of insurance policy. Because if you want to be wealthy, you need income producing assets.
 

[FriedrichVonHayek]

There is a system Developed by Harry Browne called the Permanent  Portfolio.

You invest 25% Cash,25% Gold,25% Stocks and 25% Government Bonds.

The basic premise is that you keep the allocations at around 25% in each asset class.

If an asset class surges ahead by over 10%-15% you would sell part of it off and buy into one the assets that had performed poorly.

It has been quite a successful strategy over the past 30 years or so.

[Lindeman]

I started only in summer 2014 in PMs - and my plan was (still is) to get up to 10% in PMs. Not there yet. In order - similar to Keith:

Property, stocks, pension, gold/silver.

The neat thing is that the PMs bring the most pleasure, and hopefully if the first 3 asset classes perform well - I can simply pass the PMs on to my children.

Over 20% in PMs would make me lose sleep!!!! Admire those of you who are betting the ranch..

[JayB]

Wow! Some really sensible and valuable advice here. I don't think I'm able to 'like' every post!

 

Points of interest: The only assets worth having are money earning assets. Your house is not an asset, neither is your car or boat or your stack of PMs.

 

If it doesn't make you money, it's a liability. Correct?

 

I'm not anti-PMs, far from it. As a protection of wealth, they are unbeatable. I can't remember who said it but, 'making money is easy, keeping hold of it is the hard part'.

[Pipers]

If you live INA house should you class that as a investment? What I have done is all the profit in the house is classed as investment and 50% is hedged.

PMs I invest 20% in commodities not including the above hedge.

[SilverPirate]

Anything that can be sold is an asset,ask a debt collector.even your pedigree cat. Regardless of profit margin.I agree houses and cars are liability's but still retain value.I work in caring for the elderly industry and i see estates being cleared all the time,some nice stuff is sold and some rubbish stuff is sold it all has a value.

What i am trying to get at is, we all own metals they are an accumulation of wealth they will be worth something to someone someday up or down but we will have an asset. It is better to have than to have not the bigger the percentage the less crap you bought else where.

[HelpingHands]

. If it doesn't make you money, it's a liability. Correct? 

No. Liabilities are what is owed. If you own it, it's an asset.

Maybe you're thinking of assets without a yield.