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MLNCoins

Should I buy miners/gold funds with this allocation?

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Posted (edited)

Looking for more experienced and sharper minds than my own to give some advice on my current asset allocation and whether to use some stock allocation, to put into Minors/gold funds and further my holding on precious metals, or whether to stick to bog standard equities. FYI I only hold Vanguard Lifestrategy 80% in SIPP and ISA as I'm not someone who looks at charts every single day, I just want long term growth. Allocation so far is this:

PM's (purely physical) - 21%

S&S's inc SIPP, ISA and workplace pension - 26%

Cash - 45% (house deposit and emergency fund)

Crypto - 6%

Other - 2%

So now you can see where I stand with percentages, my question is, would it be prudent to get a holding within the mining sector through SIPP and ISA, by either holding off on buying physical/equities and switching the money I use for those, into something like a gold fund, to further diverse in technically both sectors? Would me doing so class as putting money into the stocks allocation, or PM's allocation, or both? I'm not game on buying one particular company as I feel that would segregate you from others in the same sector. 

For anyone wondering the cash, apart from emergency fund, is locked within an LISA so there isn't much room to play with in regards to that.

I hope this makes sense, just need an outside perspective.

Edited by MLNCoins

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If you use your ISA on a range of Junior miners (I have done) 

As they make sufficient profits - I skim the profits and release the "fiat" to, in effect, purchase free PM's (Physical)  😉👍

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Posted (edited)
1 hour ago, 5huggy said:

If you use your ISA on a range of Junior miners (I have done) 

As they make sufficient profits - I skim the profits and release the "fiat" to, in effect, purchase free PM's (Physical)  😉👍

Ok this makes sense, I take it you use JGDAX for this? I can see though they are at quite a high value at the moment so I suppose another question to add to the pot is whether they are even a good buy right now?

Again though, this goes back to whether investing/switching the money from standard equities to miner equities is a PM allocation, or Stocks allocation....

Edited by MLNCoins

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1 hour ago, MLNCoins said:

Ok this makes sense, I take it you use JGDAX for this? I can see though they are at quite a high value at the moment so I suppose another question to add to the pot is whether they are even a good buy right now?

Again though, this goes back to whether investing/switching the money from standard equities to miner equities is a PM allocation, or Stocks allocation....

I actually have the direct shares in jr miners

So I have kinda created my own " fund " across 7 different miners 😉👍

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1 hour ago, MLNCoins said:

Again though, this goes back to whether investing/switching the money from standard equities to miner equities is a PM allocation, or Stocks allocation....

I think of it more as a "stocks to Physical" at which point it becomes a "TRUE" Store of that wealth!

 

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1 hour ago, 5huggy said:

I actually have the direct shares in jr miners

So I have kinda created my own " fund " across 7 different miners 😉👍

Fair enough! Any exposure to big miners at all or just junior?

1 hour ago, 5huggy said:

I think of it more as a "stocks to Physical" at which point it becomes a "TRUE" Store of that wealth!

 

Noted, I'll have a look at the miner pick thread and see if I can find something mentioned that fits the bill a bit. The only thing I'm cautious about with the method of swapping one for the other is over exposure. I believe I saw something @vand said about having more than 30% in PM's is classed as such. Which resonates with me personally, but of course everyone is different and has different goals than my own. 

 

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A more realistic appraisal of your asset allocation is to strip out all the cash set aside for emergency and house deposit, as that is not investible cash.

You then have almost 50% pm exposure, which is too high imo.  Our guru belangp suggests 35/65 gold/stocks is more optimal even for the most stout goldbug. 

Owning miners depends on your risk tolerance, but IMO I think 10-20% of your overalll gold allocation into a diversified mining fund is a reasonable play. 

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2 hours ago, vand said:

A more realistic appraisal of your asset allocation is to strip out all the cash set aside for emergency and house deposit, as that is not investible cash.

You then have almost 50% pm exposure, which is too high imo.  Our guru belangp suggests 35/65 gold/stocks is more optimal even for the most stout goldbug. 

Owning miners depends on your risk tolerance, but IMO I think 10-20% of your overalll gold allocation into a diversified mining fund is a reasonable play. 

I never even thought of looking at it like that. Then yes you're right. However, going off of the whole "don't sell your PM's" thread, I'm in the category of reluctant sellers because of the whole situation right now, so is this something that I just need to bite the bullet with and split now, or hold off until the pandemic dies down, then re-assess. I'm not someone who wants to "time the market", its more of an insurance thing for me and my immediate family. 

I think what I could potentially do is bump up monthly payments into index, and hold off on PM's, in 6 months ill have another look at the revised asset allocation percentages.

 

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Posted (edited)

Im very much interested in this - know nothing about buying stocks, so watching with interest. 
Does not take me long to get up to speed mind you. ;)

It makes sense on a Bull run to invest in the producers & as you say invest any profits into physical, especially on dips, which should happen with gold. 

It almost seems to simple, but wealth development should be simple shouldn't it. 

Edited by Stacktastic

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