What are the drawbacks of diversifying bonds?
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The gold and silver market is very volatile, so diversifying bonds is a very good idea for risk reduction, but over-diversifying can reduce fixed income stability and will increase complexity. Before investing, keep these things in mind:
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Bonds offer a fixed interest rate, but gold and silver won't (unless you invest in SGBs).
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Gold is still a safe option, but silver's price fluctuates a lot because of industrial demands. This all will create more price fluctuations in your overall portfolio.
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When you sell gold and silver, there is a capital gains tax, which is different from the bond taxation system.
If your primary goal is stability and income, then you should rethink investing this much in gold and silver. I suggest you invest in Sovereign Gold Bonds (SGBs) as they are more tax-efficient.
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