Instead of laying out countless investment thesis's (doom & gloom narratives) on why you must own gold and silver and all the mountains of supporting documentation and charts to accompany “this” perspective.

I would like to offer something a like different, my personal approach to the physical holding of gold and silver. There is no magic percentage number to how much gold or silver a person should hold in their portfolio. Everyone’s needs are different, my rule is based on two questions I ask myself. How do I see the world going forward in the next 5-10yrs. If I believe we are heading toward a stable environment, positive growth with controller/lower inflation, then I want to be at the low end of the spectrum of physical holding, somewhere around 10%.  If this is not the case, and I believe we could be headed for choppy waters globally, both financially and geopolitically with higher inflation, I want to own more, somewhere in the range of 20%.

The second indicator/ factor I like to look at is price, is it cheap or expensive at the moment in relative terms (vs. U.S real interest rates, real estate, stocks, petrol & oil, bread, beer etc).

As I see gold as a long term store of value (not a trade) an insurance policy if you will, price action and technical analysis doesn’t confirm the true value in my opinion but act more as an indicator to where we are in the cyclical cycle, bear or bull market.

For the reasons above, I own roughly 25% of my portfolio in physical gold and silver at the moment.

My silver to gold holding is based on what I think the correct mining ratio is, roughly between 8 & 10% (8 -10 ounces of silver mined for every 1 ounce of gold). I then take the GOLD/SILVER RATIO (CFD) which is currently 80% (as of this writing) 80% - 10% = 70%. As I believe to be more reflective of the mining ratio the G/S ratio should reflect the mining ratio, silver is undervalued by 70% (Again this is my perspective and people are welcome to interpret the above in their own way). 

Therefore I own 70 ounces of physical silver to every 1 ounce of physical gold. I revaluate and balance this portfolio every 6 months and adjust accordingly.  

If you made it this far, you might ask yourself, how and where do I keep this amount of physical gold and silver. Personally, I like to diversify my holdings. Some I like to keep in-house or close by, a portion in a safety deposit box (private/outside the banking sector and regulations), this can also be done outside the country, Singapore, USA, Canada, Australia, Cayman Islands, Zurich just to name a couple of places with safe jurisdiction with the rule of law, to help mitigate the local risk. Another alternative is a physical Gold and silver trust which can be traded like a stock option, easy to buy and sell out of. 

At the end of the day, owning the physical metal is your insurance and you have a tangible asset to not be tied to the existing financial system. As an asset that has stood the test of time for more than 5000 years.

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