Rebalancing & Gold - Too much of a good thing?

Elizabeth Johnson

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Rebalancing & Gold - Too much of a good thing?

elizabeth_johnson💰Established (100-250k)

about 3 hours ago

Key Takeaways

•Okay, so I'm an accountant here in Atlanta, and I've been pretty bullish on gold in my IRA for a while now.
•Got about $180k invested in total, with around $45k of that in physical gold (held in a Gold IRA).
•I opened it up about 3 years ago, really loving the tax benefits and the hedge against inflation, especially with all the printing going on.

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Okay, so I'm an accountant here in Atlanta, and I've been pretty bullish on gold in my IRA for a while now. Got about $180k invested in total, with around $45k of that in physical gold (held in a Gold IRA). I opened it up about 3 years ago, really loving the tax benefits and the hedge against inflation, especially with all the printing going on. My initial thought was to keep it around 15-20% of my total retirement portfolio, but with gold's run lately, it's actually crept up to almost 25%.

On one hand, I'm obviously happy seeing those gains. It feels good having that tangible asset, especially when the stock market gets squirrelly. I picked up some nice allocations of American Gold Eagles and Canadian Maple Leafs, feeling pretty solid about their liquidity if I ever need it later. But on the other hand… 25% feels a little high for my comfort zone, even with my belief in gold's long-term value. I'm torn between letting it ride and rebalancing back down to my original 20% target. The logical side of my brain is saying trim it, but the emotional side, seeing that shiny performance, is yelling "don't touch a good thing!"

Anyone else hit this point with their Gold IRA? Did you stick to your guns on your allocation targets, or did you let it grow for a while? What's your average allocation if you don't mind sharing? I'm leaning towards selling off a small portion to bring it back down, maybe 5-7k worth, and reinvesting that into some of my dividend stocks that have been underperforming. It just feels a bit counterintuitive to sell an asset that's performing well, even if it's for portfolio balance.

Also, completely unrelated but for anyone just starting out, if you're curious about how a Gold IRA even works and want to see if it's a fit for your own situation, I found this Gold IRA Quiz really helpful when I was doing my initial research. It helped me understand the different options and what kind of metals are eligible. Definitely worth a quick run-through if you're on the fence or just learning.

Thoughts on rebalancing? Keep the gold or trim it back? Would love to hear some diverse opinions.

3 comments

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Best Answer▲ 5 upvotes

catherine_bell🏆Advanced (250-500k)

Totally get being bullish on gold, especially with the inflation fears lately. But "too much of a good thing" is a solid question to ask. While $45k out of $180k isn't insane, depending on your age and overall financial picture, that's a pretty chunky allocation to a non-income-producing asset.

I mean, the tax benefits are great, but are you potentially missing out on growth elsewhere by having such a significant portion tied up in something that historically moves a bit slower than, say, a diversified equity portfolio? Just food for thought, especially if you're not super close to retirement.

Comments (3)

michelle_collins🏆Advanced (250-500k)Real Investor•less than a minute ago

Totally get where you're coming from with the "too much of a good thing" feeling. I had a similar situation a few years back, though on a smaller scale. My gold allocation had really popped, and while I was stoked about the gains, it felt a little lopsided in my overall portfolio. Ended up rebalancing a bit, just to sleep easier at night. Still love gold, but it's all about that balance, right?

mark_adams👑Elite (1m-5m)Real Investor•less than a minute ago

Hey, cool to see another ATL local! Quick question about your setup: when you say you opened it up 3 years ago and are loving the tax benefits, are you referring to a traditional IRA that you converted to gold, or did you open a brand new self-directed IRA specifically for the gold? Just curious about the mechanics.