With stocks setting new records every other day it is hard to resist the temptation to get into the stock market arena. It is also well known that in the current economy you must invest if you want your money to produce wealth or at least a sound retirement. Yet, simply investing in paper assets is not a wise move, because while no one wants to see stocks pluming like they did in 2008, it could happen again. This is why many investors protect their paper portfolio with gold and silver bullion coins. While this is a sound hedge strategy it still is not enough because gold and silver have recently lost some of their clout.
Stocks backed by gold and silver bullion are good first steps to creating and protecting one’s wealth. However, don’t underestimate the bright rare coin outlook. Rare coins, like bullion coins do offer precious metal protection for paper assets. Which investment is better, bullion or rare coins? According to Coin Week the answer depends on who you ask, and when the question is asked. This is because there have been periods when bullion coins have performed better, and other times when rare coins have been the better investment.
The best way is to invest in both. You achieve sound precious metal backing for your paper investments and you gain wealth because rare coins tend to increase in value as time passes. One thing is certain, if precious metal prices drop, such as they did recently it is likely your rare coin collection will not be affected. Why? Because rare coins are driven by coin scarceness, coin grade, and the rare coin collector market.
Zimbio.com states that another sound reason to add rare coins to tour investment arsenal is that gold and silver bullion can lose their value much faster than collectible rare coins. As mentioned, rare coins are driven by supply and demand, and if demand lessens rare coins too can go down in value. However, the lessening of demand for rare coins takes a much longer period of time to occur. Certainly, the rarest and most coveted rare coins sought by collectors will never lose value, simply because their supply will always be very small and collectors will always want certain coins.
This is not to say that investors should not buy gold or silver bullion when prices drop. The savvy investor knows the current gold bull market is over 10 years old and it is likely gold will be going back up soon. It is imperative that investors not make the same errors that occurred in 2008 when many financiers lost everything because they did not diversify their investments with physical assets like bullion and rare coins. There is no better hedge than gold, whether it comes from bullion or rare coins. Furthermore, rare coins have sold for thousands and even millions of dollars at auctions, making rare coins quite a lucrative investment.
Not only are rare coins sought after, but coins that have a story to tell or have historical value are in vogue with coin collectors. You can cash in on this market if you have acquired the necessary rare coin education. This can take time, but can be financially rewarding. Coins popular with collectors include Indian heads and $20 Saint Gaudens Double Eagle coins, which contain almost one ounce of gold.
Finally, investors have always asked which investment is better, rare or bullion coins. The best advice is to invest in both. Bullion coins do a fine job of protecting paper assets, while rare coins can bring in handsome profits.