(MONEY Magazine) – Not even a goldbug could have conjured up a likelier time than now to diversify your investments with a little gold, silver or platinum. The Wall Street crash has shown in Technicolor the dangers of putting all your cash in stocks. Having 5% to 10% of it in precious metals in 1988 will provide -- pardon the expression -- portfolio insurance. You will not get rich next year from precious metals, however. ''I would look for modest strength in 1988,'' says William O'Neill, research director for Elders Futures, an Australian brokerage house that specializes in commodities. And the outlook for gold-mining shares is hazy at best. After a 38% dive in October, their price/earnings ratios dropped from 1987 highs in the 70s and 80s to the merely substratospheric 40s to 50s. That is still triple the average P/E for all stocks. Why won't gold take off as it did in 1980, when it pushed above $800 an ounce? People are just as worried about the economy, and as Rabbit Angstrom said in John Updike's 1981 novel Rabbit Is Rich, ''The beauty of gold is, it loves bad news.'' Not anymore, Harry. Until the '80s, gold served as the prime refuge for investors. But many new hedges have usurped its sceptered power, such as international stock mutual funds and options and futures on stock market indexes and foreign currencies. ''Gold,'' says O'Neill, ''is no longer the only game in town.'' What's more, some kinds of bad news about the economy are bad news for precious metals. Reports of a possible recession following October's stock market collapse have led metals analysts to lower their 1988 earnings forecasts. Before the crash, many of these specialists thought U.S. inflation would rev up to 6% or 7%. Now the outlook is for only 3% to 4%. Precious metals are hardly the investment of choice in bull markets. Over the past five years as stock prices doubled, gold increased only 10%, platinum was up 45% and silver declined by 34%. When stocks crash, investors look to precious metals to cushion the fall. Weak performances by gold, silver and platinum during the latest free-fall of stocks, however, signal limited gains for metals in 1988. After rising 2.1% on Black Monday, gold ended that tumultuous week at $473.40 an ounce, up only $1.42. Forecasts for 1988 from precious-metals pros are wildly inconsistent, ranging anywhere from 5% to 20% for gold, vs. a 14% rise since January. At the high end, that would put the 1988 price at roughly $550 an ounce, compared with a recent $457. In explaining why gold should climb, metals analysts look to a nervous public, a falling dollar, Treasury Secretary Baker's favorable words about using gold as an economic indicator, worries about Mideast and South African tensions and low production costs in North American gold mines. There is a dissenting view. Gold bear John Dessauer, a precious-metals analyst in Orleans, Mass., sees the price plunging to as low as $330 next year, partly because of slack industrial demand and low inflation. Silver and platinum prices are even harder to call. When the economy is weak, both tend to rise less than gold or fall further. Analysts, when pressed, hazard the guess that if gold rises 20%, silver will gain 5% to 10%, leaving it below its April level of $9.66 an ounce. Silver has gone up 14% since January to around $6.50. Platinum is expected to rise 10% to 15% in 1988, peaking at about $650 an ounce. It is down 2% so far this year. Best ways to invest in each metal:

Gold coins and certificates For greatest convenience, buy gold in the form of bullion coins. They are easy to price and easy to sell. You can buy gold bullion coins at banks, stockbrokers and coin dealers. You will be wise to have a bank or broker store and insure your coins. Expect to pay roughly $3 to $7 annually per coin for such caretaking. For reasons of liquidity and price, says Harvey Stack, a New York City dealer: ''The best gold coins to buy are the one-ounce American Eagle and Canadian Maple Leaf.'' Markups on these coins, at about 3%, are hefty -- but nothing compared with a premium as high as 30% on many less popular coins. Another way to own gold bullion is through certificate-of-ownership programs at banks, brokerages or nationwide coin dealers. Each certificate usually sells for roughly 3% above the price of an ounce of gold. You also pay an annual storage fee of about 1%. Buying a certificate makes you a part owner of a stash of bullion bars or coins held and insured by the dealer.

Gold-mining shares The recent price swings by gold-mining stocks give fair warning that they are far riskier than gold coins. Mining share prices do not follow metals prices: they exaggerate them. If you crave this sort of speculation, at least go for the diversification of a precious-metals mutual fund, which puts you into roughly 50 mining companies. Gold funds rose in value by 40% to 60% in the nine months before the crash. Since then, most have fallen as much as individual metals stocks.

Silver If you plan to plunge into silver, be prepared for even more price volatility than with gold. ''Silver moves a lot because people see it as a $7 stock,'' says Stephen Brophy, precious-metals product manager for E.F. Hutton. Jeffrey Christian, who runs the CPM Group, a metals-analysis firm in New York City, says silver could spike up to $11.50 an ounce in 1988 on panic buying, from a recent $6.20. Although the U.S. Treasury mints an American Eagle silver bullion coin, investors should buy certificates or actual silver bars instead, says Jeffrey Nichols, president of American Precious Metals Advisors in New York City. He thinks the one-ounce Eagle, which has been selling at about 15% above an ounce of silver, is too pricey. The commission on a 100-ounce silver bar is a steep 6% to 10%. By contrast, a certificate costs about 3% over the metal's price.

Platinum In 1988, as usual, platinum will be the riskiest and least predictable of the three precious metals. Prices were way up in early 1987 before falling 30% to current levels of $460. Only 3.3 million ounces of platinum are produced annually worldwide, compared with 620 million ounces of gold. So a slight change in supply or demand can have a big effect on platinum's price. Both sides of the economic equation are iffy in 1988. On the supply side, nearly 85% of platinum comes from mines in turbulent South Africa. And two industries dependent on consumer spending, autos and jewelry, control most of the demand. The simplest investment in platinum is the Noble, a bullion coin issued by the Isle of Man, a British crown possession. This coin, which sells at roughly 5% above the metal's price, is not quite as liquid as the Eagle or Maple Leaf. U.S. coin dealers began selling it only last May. So you might have to look a bit for a dealer who will make you a Noble gesture.

BOX: What the pros say Many analysts expect gold bullion to rise in price at least 5% and perhaps much more next year and, in general, recommend it as an inflation hedge. The experts are less glowing about silver and platinum. And gold-mining shares look extravagant at 40 to 50 times earnings.