How much gold in your VP?

[goodasgold]

What percentage of your VP consists of gold, either in physical form or funds? What is the rationale for this decision?

When I began the PP in early 2013, 10% of my VP was invested in gold. The rest was in a conventional age-in-bonds Boglehead account. This percentage has shrunk considerably with gold's drop in value since Spring 2013.

As for a rationale, like many PPers I am concerned about the eventual deterioration of paper money's value  due to inflation, which in my view will be seen in the future as the Best Friend Forever of politicians in their desperate quest to somehow pay off the vast and ever growing unfunded liabilities which they are irresponsibly building up.

It seems to me that about 10% of the VP in gold would help to counteract the eventual drop in a VP's other assets. But I don't have a clue when mega-inflation will raise its evil head, causing non-gold assets to shrink in value. It could happen decades from now, or it could begin tomorrow. No one knows. So I am brooding over whether I should be content with the present value of gold in my VP, or whether I should sell some assets to rebalance the VP at 10% gold.

Your thoughts on this dilemma would be welcome.

[dualstow]

0%
Rationale: gold in the pp is probably the reason I have a vp in the first place. I don't know how to evaluate gold and while I'm comfortable having some as an essential component of my pp, it's still a wild card.

Someday I may go all in with the pp and have 25% of everything in gold. Until that day, the vp is for munis, intermediate treasuries, and individual stocks.

[Pointedstick]

0%. My personal solution to the problem of deterioration in the value of money is becoming less dependent on money to live. That means financial efficiency, growing your own food, keeping a flock of chickens, producing your own electricity, being friendly with trustworthy neighbors, having friends with skills you lack, and developing real-world skills that a variety of people will find useful in a hyper-inflationary environment. If you can charge $1,000 for a dozen surplus eggs that your chickens lay, you're in a better situation than the salaryman trying to feed his family on store-bought eggs who's getting a "raise" every week that doesn't keep up with the devaluation.

Of course, I'm not all the way there yet (or very far at all). But I suppose you could say the same thing about a person worried about inflation who doesn't yet have all the gold they'd feel comfortable with.

[dragoncar]

-25%

[Ad Orientem]

None.

[buddtholomew]

None in gold, 5% in GDX - mining stocks.

[AdamA]

I bought some GDXJ mining options last year around this time. 

They are doing poorly.   

[tnt]

25% for me but I have 25% in VWINX to replace cash.  The only reason I have 25% in gold is that I can't get myself to go any further into equities yet, at last check this allocation was doing 5.8 YTD beating the S&P.  Everything is out of whack with QE, I would love to have 100 equities but am concerned about a correction. With stocks, bonds and gold all advancing and terrible GDP, there is no rationale for increasing equties and something has to give.  Gold loves QE so if they slow down withdrawal that is bullish for gold.  2000-2013 the total stock market did 4.22 CAGR, gold did 10.18 and the PP with VWINX did 7.97.  Anything can happen but I think PP is best for now or something close.

[KevinW]

Thought I'd pipe in --- I don't have a VP.

[barrett]

Yeah, I just kinda realized that I don't really have a variable portfolio either. I was wondering why that section of the forum was never very captivating for me. So 0% of 0.