Gold IRA Allocation Strategies

When planning for retirement, allocation strategies are essential. You should determine how much money you have to invest and consider how much to invest in various assets to create a diversified, profitable, yet stable portfolio.

If you have precious metals in your retirement portfolio, you need proper gold ira allocation strategies in place. How much of your retirement funds you allocate to gold will be determined by your risk appetite and future outlook.

Since an investment in gold is not necessarily going to generate a considerable profit and will certainly not grow in value overnight, your strategy needs to balance the requirement for retirement income and a store of value for your savings.

Here are some gold IRA allocation strategies you can consider for your Gold IRA.

Light Allocation Strategy

As an investor, careful analysis is required for success. If your research indicates that the economy will likely grow soon, you don’t want your money lying idle. You will have to invest it in as many profitable opportunities as are present.

A light allocation strategy in reference to a Gold IRA means that you don’t allocate a lot of your funds to buying gold.

An investor who chooses to follow this strategy believes in the growth of the economy and therefore does not wish to invest much of their funds into gold. They will only allocate 5% to 10% of their retirement fund to gold and other precious metals.

Moderate Allocation Strategy

When you follow a moderate allocation strategy, you will allocate 15% to 25% of your retirement fund to physical precious metals.

As an investor, your analysis leads you to believe that the economy will remain stable for the short term. However, there may be some uncertainty. To overcome this, an investment in gold can act as insurance if the economy was to take a turn for the worst.

With this in mind, you will allocate a little more of your capital to gold and other precious metals, as these should remain stable regardless of the values of stocks and shares.

Heavy Allocation Strategy

If the future economic outlook is uncertain, a heavy allocation strategy is required when investing in gold or precious metals.

A heavy allocation strategy means allocating 30% to 50% of your retirement funds towards precious metals allowed in a Gold IRA. This way, you are sure that you have enough gold and precious metals to maintain the value of your funds in the future.

When you choose the heavy allocation strategy, ensure you monitor your portfolio regularly. Instruct your Gold IRA trustee to send you regular updates on the performance of your portfolio. With the updates, you can change your allocations depending on the performance if need be.

Different Types Of Investors And How They Allocate Precious Metals In Their Gold IRA

Aggressive Investor

An aggressive investor is one who has a lot of money to invest in a range of assets. An aggressive investor seeks to earn high profits from his investment endeavours. Whereas gold has little opportunity to profit, the aggressive investor still needs insurance and to maintain the value of their money.

Consequently, the aggressive investor follows a light allocation strategy in their investment in gold.

The portfolio of an aggressive investor will have just about a 5% allocation in gold and other precious metals. The rest of the portfolio will be invested in assets that the investor believes are high-value and profitable.

Moderate Investor

A moderate investor invests a little more of their money in safe options like precious metals, as well as stocks and bonds. They are looking for more  assurance that their investment is well protected over time.

Generally, the portion of gold in a moderate investor’s portfolio is about 10% of the total portfolio.

A moderate investor likes to invest in precious metals because if the markets don’t go his way, there will always be a fallback on the gold in their portfolio. A high return in the stocks and bonds markets is easily reinvested if the moderate investor has some precious metals as a backup.

Conservative Investor

A conservative investor views the market warily. To guard against the loss of their funds, they adopt a heavy allocation strategy for gold and other precious metals.

A conservative investor will have at least 25% of their portfolio invested in gold and other precious metals.

With uncertainty in the market, gold is an essential inclusion in a portfolio. Gold provides real diversification for a conservative investor. Stocks, bonds, and real estate are highly correlated. A negative move in any of the classes causes a negative action in the rest. But the 25% of their portfolio that Is invested in gold remains safe.

A conservative investor values how gold remains stable in the long term and how it provides a buffer of protection if the other assets don’t realize a profit as expected.

Comparison Of Gold And Stock Market Returns

An analysis of gold and returns of the stock market shows that even as gold rises in value, it has never outdone the returns in the stock market. As a result, most investors will not allocate significant portions of their funds to gold.

However, portfolios that had gold in them always remained relatively stable even when the markets were uncertain, making gold a great way to add some variety to a portfolio for stability and enjoyment of returns.

Compared to stocks and bonds, the value of gold rises slowly. You cannot expect to profit by investing in gold and it is a long-term investment. Yet, because gold and other precious metals retain their value, they are great insurance for when your other asset classes fail.


How you develop an allocation strategy depends on how much of a risk you are willing to take with your retirement fund. You could make more of a profit by investing in stocks and bonds, but there is more of a risk of you losing these investments, too, whereas the value of precious metals remains stable.

In order to develop good gold IRA allocation strategies, be sure to discuss your options with an IRA Administrator and consider all outcomes of your investment. Even when your IRA is fully set up, be sure to keep an eye on your various assets to make sure your strategy is functioning as you imagined and that your funds should not be redistributed.

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We discuss the best allocation strategies for precious metals and how to save thousands of dollars in fees in our must read Gold IRA guide.

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