Spread It Out
Greg Richardson, MS, CFP and wealth advisor with Halpern Financial in Rockville, Md., recommends up to a 6% portfolio allocation in gold for conservative clients. He diversifies the allocation across exchange-traded funds (ETFs), mutual funds, and broad-basket commodity funds.
He uses SPDRs Gold Trust (GLD) for a direct-investment exposure to the metal that retains liquidity and avoids the hassles of storing physical purchases.
His mutual fund investments focus on gold mining stocks and include funds such as American Century Global Gold Investments (BGEIX) and Fidelity Select Gold (FSAGX).
The final category, broad-basket commodity funds, typically includes agriculture and energy investments. “The downside is you don’t get a true gold play here (with the broad funds) but you are getting a more diversified approach to investing in gold,” Richardson says.
Hit the Stops