When it comes to protecting your investment portfolio, most experts agree that diversification is key. But one asset class your stock broker wont tell you about is precious metals. What are the rules of thumb you need about gold and silver, what are their differences, and what are the benefits?Are you taking action to secure your retirement portfolio against another market meltdown or collapse? Taking no action could leave your precious nest egg and future security in danger.

What can you do? Diversify. Most financial experts recommend diversifying a portfolio by spreading your assets across a variety of investment classes. But ask your stock broker about diversification and theyll most likely try to sell you a mix of stocks, bonds, mutual funds, international investments, and maybe have you set aside some cash.

So whats the problem with that? Theyre all paper assets.

These investments all rely on the performance and integrity of financial instituions, global governments, business practices, and world events. But weve seen too often how fallible these things can be. They can fail and fail dramatically. (Remember 2008?) These failures can have a profound effect on your retirement value.

The Story of the Investors Lost Decade

Look back over the last 20 years and youll see that there is more to worry about that failure. Theres also stagnation.

A shining example of this occurred in the decade of 2000 to 2010. During this period too many Americans watched as their portfolios remained flat or dropped by as much as 50 percent as the SP 500, an index that many consider to be the best representation of the stock market, barely gimped along. And by gimped along I mean a microscopic return, annualized and including dividends, of 1.4 percent! If your money was in the SP, your retirement wouldve lost a quarter of its value. This doesnt even consider the drop in currencies during this period.

For the savvy investor the was an alternative to flat decade of the SP: It was gold and silver.

In this period of the Lost Decade, gold and silver both experienced gains of 300 percent. Had you included these metals into your portfolio along with your other paper investments, your portfolio wouldve improved proportionately with your allocation of gold or silver.

The Advantage of a Balanced Portfolio

What does that mean, a balanced portfolio? Having a balanced portfolio can be defined as having a group of investments divided across various asset classes that share both positive and negative correlations. This means having investments that have a tendency to move up together (positive) or in opposite directions (negative). This gives your portfolio the power to counterbalance itself in periods of stagnation or tumult.

What is the term Asset Classes mean? Asset classes include stocks, bonds, cash, and an alternative fourth class. This class includes the tangible assets of gold, silver, and other precious metals.

Asset classes: What are they? Classes include stocks, bonds, cash, and a fourth class of alternative tangible assets. This class includes gold, silver, and other precious metals. Gold has a history of thousands of year as a holder of value and more recently a safe haven for investors as it tends to move in the opposite direction of the stock market. When your portfolio is balanced over divergent asset classes you have the ability to adjust your investment based on your perspective of the economic future.

How Much of Your Portfolio Should You Invest in Gold and/or Silver?

Generally speaking, most financial experts will recommend an allocation of 5-20 percent of your portfolio in precious metals. As I mentioned before, if you were one of the investors who had made the smart move into gold and silver during the Lost Decade, you wouldve been protected not just from losses but from stagnation as well.

The Difference Between Gold and Silver as an Investment

One distinct benefit that gold and silver both offer is in their extreme liquidity — they can be easily converted into cash. For investors seeking to have a substantial portion of their portfolio dedicated to liquid assets, gold and silver are excellent options. Otherwise, these metals can differ from each other in a variety of ways. Foremost among these is that the value of gold is much greater. Because gold is more expensive per unit weight than silver it is much easier to ship and store. For silver, its lower value also enables its price to move more percentage-wise than gold. Of the two, golds price tends to move slower and less significantly and has historically shown more stability.

How You Can Start Protecting Your Assets Now

Ive discussed the many benefits of gold as an investment in your portfolio. But if youre a new investor to precious metals and youre not sure where to begin, youre probably wondering whats the best next step to take?

Of course, every investor owes it to themselves to do their own research and due diligence. The best first step should always be to get the best information available. Developed to be an asset to every new investor is a new FREE mini-course entitled The New Investors Guide to Investing in Gold and Silver. Its available to you as a downloadable PDF.

In this course you will learn of the ins and outs of precious metals investing, how to make the most of the benefits and how to avoid the pitfalls. The valuable information contained in this guide could help you make the kinds of decisions that could save you thousands of dollars.

If your investment portfolio isnt sufficiently diversified you could be leaving your retirement in peril. The clock is ticking on the next market meltdown and the time to act is now. Begin protecting your assets today.

www.RCBullion.com or call (213) 465-4835