It is no longer a matter of whether or not you should buy gold and/or silver but, rather, which type of investment(s) and how much. You don’t need a lot – but you do need some – and here is a primer on just what type of investment vehicles are available and recommendations on just how much you should buy.

Gold is the best hedge against uncertainty there is..

How Much Gold Do You Need?

The U.S. firm Ibbotson Associates, in a study for Canada’s Bullion Management Group, found investors can potentially improve their balance of risk and reward with a precious metals weighting of 7.1% in conservative accounts, 12.5% in moderate accounts and 15.7% in aggressive accounts. Precious metals can include silver and platinum, but it’s a term that primarily means gold.

Another U.S. firm, Wainwright & Co. Economics Inc., looked at the need for gold in one’s portfolio from an inflation protection point of view and concluded from their research that “a U.S. equities portfolio in which 15% of the assets are diverted to gold bullion would be effectively immune from damage due to a rising gold price and that is, we believe, equivalent to immunity from inflation.”

Which Vehicle Should You Choose?

a) Physical Gold and Silver

Gold in bars or coins makes sense if you are concerned about the complete breakdown of society but you will have an asset that needs to be securely stored.

b) Individual Gold and Silver Stocks and/or Their Long-term Warrants

Gold and silver stocks have an added degree of risk because you not only need gold prices to rise (and gold stocks and gold bullion don’t always move in unison) but you also need your precious metals company to be a well-run business. For greater leverage on your invested dollars consideration should be given to an investment in commodity-related long-term warrants.

c) Precious Metals Mining Mutual Funds

PM funds hold the stocks and/or warrants of gold, silver and platinum companies involved in the producing, developing, exploring or buying (via royalty payment arrangements) of such metals. While they are among the most expensive in terms of the fees they charge they have a long history of bringing the benefit of rising gold prices to individual investors (and the opposite, of course).