How Many Gold Coins is the Right Amount to Have for Retirment

In a recent comment to the Gold vs. Stocks article, Anne asks, what's the right formula for dividing your assets amongst the various investment classes?

Anne, nobody has a crystal ball and certainly there is no exact formula for dividing your investments over the various classes.Everyone is different, every portfolio is different.Consider this:The family with 25 million of net worth can afford a greater at-risk portion of their portfolio than someone with a $1 million net worth.And the one who has a million of net worth has more risk tolerance than does the one who has $100,000 of net worth.

Many variables go into a strategy.Certainly, no one wants to go "all in" with any investment if it puts your ability to survive at risk.Maslow, put food and shelter at the top of our "hierarchy of needs."If you lose that, your choice is slavery or death and those are lousy choices if you ask me.

The secret is to be informed and have knowledge of the current economic environment.And then diversify!That is the key to success.The example given in Gold vs. Stocks illustrated the effectiveness a gold diversification strategy would have had over the last 10 years.

Chances are your friendly gold coins dealer was in the business of promoting diversification 10 years ago and today those who did, are happy they did it.But let's look back 20 years and I submit your gold or precious metals dealer was making the same gold diversification recommendations.During the 90s gold was flat at best, and the stock market surged with the tech revolution.Do you think people who were diversified in gold then were complaining that they owned gold or were they happy because they owned tech stocks?

I'm thinking those who complained about owning gold and put all their money in tech stocks were not so happy when the tech bubble burst.And the cycle starts all over again.In life we need balance.Investing is no different.If stocks crashed again, would you Survive?If Real Estate languishes for 10 years will you still have a place to live?And if gold crashes do you really care as it would likely mean everything else you have is doing fine.Remember! Your gold will never be worth zero - it will always be there waiting to protect you from whatever financial disaster may be lurking ahead.