How much gold should you own?

Dear readers,

In James Turk and John Robino’s book, “The Coming Collapse Of The Dollar And How To Profit From It“, James and John has shared their thoughts on how much gold should one own bearing in mind the possibility of a currency crisis.

Ask the average financial planner about how much precious metal should you own and you’ll get the conventional answer: Put most of your money in stocks, bonds, and cash, and no more than 10 percent into gold as a “hedge” against the highly unlikely event of financial instability. But as you’ve no doubt gathered, we view this traditional asset-allocation strategy as wildly speculative, since cash, bonds, and many stocks are at grave risk in a dollar crisis. Instead, you’re better off putting not just a bit, but the bulk, of your cash into physical gold and most of the rest of your capital into gold-related investments. How much? Again, that depends on your needs, temperament, and objectives, but the logic is essentially a mirror image of the traditional approach: The more conservative you are, the more gold you should own. Put another way, when the dollar is collapsing, the asset most likely to hold (i.e., preserve) its value is gold. So if preservation of capital is the goal, then you should own physical gold for liquidity, along with investments in the shares of unhedged majors and/or the mutual funds that own them. More-aggressive investors can hold mining stocks with greater leverage, along with silver, foreign bond funds, and mutual funds specializing in U.S.-based resource, and manufacturing companies. And the most adventurous should focus on smaller miners, the shares of U.S-based manufacturers, gold-based derivatives, and short positions in financial stocks.

Hold just enough dollar cash to cover your day-to-day bills, since its value will decline, if not evaporate. Avoid U.S. bonds and anything else with a payment stream denominated in dollars. And stay away from future trouble spots like shares of consumer finance companies. No matter how conservative they look, in the coming decade they’ll be anything but. Here are a few possible ways of turning these principles into portfolios:

Conservative

Dollar cash 5%
Gold bullion 40%
Precious-metals mutual funds and unhedged gold-mining companies 30%
Foreign bond funds 25%
Moderate

Dollar cash 5%
Gold bullion 20%
Silver 10%
Shares of unhedged majors and high-quality mid-tiers 35%
Foreign bond funds 15%
No-load funds specializing in U.S.-based resource/manufacturing companies 15%
Aggressive

Dollar cash 2%
Gold and silver bullion 18%
Unhedged gold-mining majors 20%
Shares of emerging mid-terms, juniors, and property plays 35%
Short positions in U.S. consumer finance companies 20%
Long-term call options on mining shares 5%

To read more on how you can profit from the collapse of the Dollar, purchase The Coming Collapse Of The Dollar And How To Profit From It online for only USD$17.95 via Ebooks.com.

The Coming Collapse of the Dollar and How to Profit from It

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