Financial planning pro says to allocate 8% of your portfolio to gold "as insurance"...
JOHN GRAVES, a financial planner for 26 years, is a big believer in the role of gold in a diversified portfolio.
Appearing on our New York Markets Live show, Graves explains how he believes gold should comprise 5-8% of a typical portfolio. Because "nobody can predict the future...and if there is a catastrophic event and the stock market dives gold will go through the roof.
"Gold is the ultimate portfolio insurance tool. I don't know if things will be wonderful or horrible. If things go horrible I know that gold will increase significantly in value."
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John Graves is the founder of The Renaissance Group, independent financial planners and registered investment advisors in Ventura, CA. He is also the author of The 7% Solution: You Can Afford a Comfortable Retirement.
Graves' 3 step rule to plan for a comfortable retirement is simple:
John Graves also talks about the screen he uses to identify stocks to buy. He looks for low debt-to-equity (70%), a consistent dividend yield of 5% or more, price-to-book of 1.5, average trading volume of more than 50,000 for liquidity. He places a 10% stop loss on stock trades.
Asked by an investor in California about buying gold regularly, starting with a small sum of $500 and then Dollar cost averaging monthly to build the account, we also explain how low trading fees and the benefits of physical bullion can work in a retirement account.
