Got Coinage? The Case for Investing in Coins
Most readers of StockMarketInvesting.com are diehard stock investors. We too are obviously quite found of stocks and frequently tout how they are the best performing asset class over the long term. Still, too much of a good thing often does not work out so well. Just think about the volatile and non performing stock market since 2000 if you need a reminder. Stock investors need diversification options to survive through crashes. In this post we take a look past the common alternatives such as bonds, real estate, or currencies and examine coins as an investment.
Stocks and bonds may be good performance but they certainly are not satisfying to own. Unless you take physical delivery of stock certificates from your broker there is nothing tangible about your investment. It could simply evaporate overnight in the case of a bankruptcy or you could be locked out of the markets should a stock halt trading for any one of many potential reasons. Your shares can also be diluted should the company decide to issue more shares. None of these detractors apply to rare and collectable coins.
The best thing about a coin is it is tangible and brings a real sense of value to its holder. Most are beautifully made and show remarkable craftsmanship which add to their allure. The US Money Reserve sells an assortment of coins available in different metals. Gold coins are the most popular and are way to make small investments in gold if you don’t have the capital to buy bullion. Silver and platinum are also common options for coin investors.
Since there is a finite amount of precious metals in the Earth you do not have to worry about your investment becoming diluted even if a mint produces more of the same type of coin. The supply of gold in the world is relatively fixed so the value of the coin attributable to gold will also be stable. In time, each series of coins increases in value as they become more and more rare. Some are lost, some are melted down, and others become corroded. All of which make old coins in pristine condition quite valuable to collectors.
Another nice characteristic of coins is they offer great hedging for a large stock portfolio because of the negative correlation between precious metals and stocks. We’ve all witnessed the huge jump in gold’s price as the stock market has sputtered for over a decade. Get some coinage, its make great alternative investment.