Holding gold and silver as part of your big financial picture

The majority of our clients who meet their wealth goals do so by avoiding a day-trading or flipping approach when it comes to their precious metals. They instead adopt a wise strategy of patience, persistence, and preparation.

Gold and silver play a specific, long-term role in the creation, growth, and protection of their overall financial picture. For most of these successful folks, the name of the precious metals game has been “buy and hold.”

This primarily has to do with the nature of precious metals and the activities of our financial markets and economies. Gold and silver bullion bars are absolute – they don’t shrink, get damaged, or change over time. The same can’t be said about economies or the products being traded in the markets.

Bullion adds true diversity to your portfolio while remaining outside of stock markets and mainstream currency worlds. In fact, that’s a great part of its appeal and why price alone does not determine gold’s worth. Other factors, such as gold’s purchasing power over time, have leant to this asset’s historical endurance. As explored further in our Build Your Knowledge section, some consider precious metals to be a hedge against inflation, while others see it as providing long-term security against a depreciating dollar and market turbulence. Either way, bullion is often viewed as the stable bedrock of a carefully-crafted wealth plan.

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“Price is what you pay, value is what you get.” – Warren Buffett

Consider the big picture and make adjustments as needed

We generally agree with the suggestion that Canadians should hold roughly 10 – 15% of their net worth in physical gold, silver, or platinum. There are times when this amount might be higher or lower, either by choice of circumstance. For example, if the value of the metals you’re holding has risen, especially compared to that of other financial products in your portfolio, its overall percentage will be boosted.

This is one of the reasons why we encourage clients to do a review of their overall financial picture at least once a year. Not only will the proportions of your asset mix change over time, your goals may have also shifted. It may make sense to free up or reallocate funds to further pad or balance your portfolio with more physical gold or silver. On the other hand, factors like your financial goals, time horizon, and market indicators suggesting that your purchasing power has been optimized – might indicate that you’ve reached a good time to sell some of your precious metal assets.

Guildhall’s team can help you in your assessment, and provide you with services – such as brokering the purchase of more bullion, opening a registered account, or handling a gold or silver sale on your behalf – so that your plans and goals are balanced and on track. We can even discuss grander dreams, like the establishment of generational wealth for your family, with the purchase of a coloured diamond.

To learn more about big picture strategies involving bullion and why precious metals are seen as a portfolio safeguard, reach out to a member of our team.

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