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How much gold should I own?

Supermarket basket of gold bullion
A gold investment should normally be capped at 10% or less of your overall portfolio. berwin/Getty Images

Gold is ubiquitous. Found everywhere and seemingly used in everything from jewelry to electronics, chances are you own gold or are invested in it. Long known as a wise investment for many, gold has taken on new life in recent months and years. Due to its tendency to maintain its value and even rise in price over time, gold investing has increased in today's inflationary economic climate. Investing in gold hit an 11-year high in September. Even Costco is now selling gold bars to customers.

That all noted, it may not always be clear how much gold you should own, particularly when stacked up against alternative assets and investments. Fortunately, there are some guidelines both purchasers and investors can abide by to fully reap the benefits the precious yellow metal can provide.

Start by exploring your gold investing options here to learn more about this unique opportunity.

How much gold should I own?

To start, it's important to distinguish between owning gold and investing in gold. For the former, there are generally no specific limitations to how much you should own and is largely dependent on your personal preferences. How much you should invest in gold, however, is a different story.

A gold investment can be beneficial for many reasons. It can help hedge against the negative effects of inflation, diversify your portfolio and provide you with liquidity that other asset classes simply cannot. That said, it's generally not an income-producing asset in the same way that more volatile stocks and bonds can be. So you'll need to invest in the precious metal differently than you would with those assets. 

Most experts recommend limiting your gold investment to 10% or less of your overall portfolio. The range between 1% and 10%, however, will often vary based on your age and overall investor profile.

To help better determine which exact percentage is right for you, it can help to look to the advice that applies to other investments. When it comes to stocks, for example, the general rule of thumb is to be invested in 100% minus your age. So, if you're 30 years old, your portfolio should be made up of 70% in stocks. 

If you're 40, it should be 60% in stocks, and so on. Overall, as you age, your investments should evolve with your needs. Accordingly, younger gold investors may want to be closer to that 10% range while senior gold investors may want to be lower and more reliant upon income-producing investments. But, again, the exact figure varies based on your circumstances.

Not sure how much you should invest in gold? Start exploring your gold options here to learn more.

How to invest in gold now

There are multiple ways to invest in gold today, each of which has its own set of advantages. This includes investing in a gold IRA for retirement purposes or as part of gold exchange-traded funds (ETF). You can also invest in gold stocks or gold futures, but the latter may be risky for beginner gold investors

Because gold doesn't come with the same familiarity that other asset classes do, it's helpful to research all types before getting started. And remember that a gold investment of any type is more of a portfolio protector than an automatic boost to your bottom line.

The bottom line

Owning gold can provide tangible, attractive benefits for owners. However, investing in it can positively affect your overall portfolio. Like any other investment, however, it's important to approach gold cautiously. This generally means limiting your investment to 10% or less of your overall portfolio. And it means researching all of your potential gold investing options to make sure that the one you ultimately choose is best equipped to provide the protections and returns you're aiming for. 

Learn more about your gold investing options — and how much to invest — here now.

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