Gold Coins As An Invesment

I just saw a Merit commercial that says they sell 1 oz. proof gold eagles, for 59.99 over spot, and that aint too bad....

I would go that route, perhaps even Buffalo's as they are pure gold, if your pops has that kind of cheddar to invest....

Moving 1 oz. gold is not as easy, as say a quarter oz. Many more people can afford a quarter oz. gold coin, before they could toss out 1800 or more for a 1 oz. version, in a bad economy, where most percentage wise across the country an world don't have a spare 1800 to fork out to buy a gold coin. Minus, them going in with the plan your dad has....

I don't like the idea either to be honest, buying in that much gold at these prices, as if it did tank back down to a grand or 1200, your pops would take a big loss, and may be gone before he has a chance to break even or turn a profit....

Just my novice opinion of course....

From my experience I have never had a problem selling a one ounce gold coin at anytime. They are easy to sell at any time in the market place. I have sold a lot of gold over 30 years and during this current long term down economy I have done my best.

Now let me set it straight if you are looking for investments then you do not ever buy PM's. Gold and silver is not an investment. What you are doing is speculating and there is a very large and important difference. Speculation is far more risk than investments. You can gain more but you can loose very big.

What should you speculate with? I don't know everyone has something they like, it could be rare coins, bullion coins or bars and rounds.

The only tip I can give if you are going to speculate in rare coins then you are looking for two things, a high grading of MS65 or above and something that is rare or has a low mintage.

I have a strong investment portfolio that includes anything from stocks to mutual funds to bonds. They have a good strong company history , pay dividends and usually easy to predict where the value is going to go in the future.

Here is the difference for a better understanding - investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time. In contrast putting money into something with an expectation of gain without thorough analysis, without security of principal, and without security of return is speculation or gambling.

Welcome to the forum!

Your opinion is just as good as anyone elses', so feel free to share it with us.

First, though, my opinion is that we are not in a gold bubble and haven't been in one. What we are in is a government spending bubble. Europe, Japan, and the USA have all spent WAY more money than we should have. Government is WAY too big and it is consuming valuable resources that the private sector needs to grow their businesses and hire more employees. This is why PMs are up in price. I wish that I could say that I think this trend is ending, that government would soon be smaller, and that capital would flow into the private sector to improve the economy... but I can't. Because of that, I would rather store my wealth in PMs than in depreciating paper dollars. An oz. of gold will always be an oz. of gold but the equivalent paper money will definitely not always buy the same goods and services. Yes, gold prices appear to float because the values of the currencies in which gold is priced are also floating. Comparing the price of gold to a basket of other useful commodities over time might give a better picture of gold's value. If not, then it is likely because there are drastic changes in the world that either did not exist in previous times or that have changed quite dramatically in recent times.

In any case, I agree that gold and silver make good stores of wealth if you are concerned about the effects of inflation on your purchasing power. Whether or not they are investments relies more on your perception of them than on any intrinsic reality. I consider them as investments while others may not. Yes, there is a speculative element inherent in PMs, just as there is in many other types of investments. I do not buy futures or options because I see them as too speculative. Others may not and freely indulge. It's all about choice and the levels of risk with which we are comfortable, our time horizon, and just how important is the money we are placing at risk. Having a 3-5 year minimum time horizon is helpful. This allows us to ride out the valleys while awaiting a peak if we are interested in selling. It is one thing to have a "paper loss" in an investment that is temporarily priced below our purchase price; it is something else altogether to have circumstances force us to sell at that reduced price.

As to the original question... I would favor buying pre-1933 US gold coins and holding them for a while to see if a good financial return could be obtained from them. The 1-oz. St. Gaudens design double eagles are superb coins with good historical value, great beauty, and that are easy to sell. The MS-63 graded coins seem to have a very good combination of quality at a reasonable price. They do not take up much storage space either and that makes owning them convenient. Good security, however, is a must. Some insurance companies will insure coin collections via a rider on a home-owners' policy, which is worth considering.

I do agree on the government spending bubble and I wish I could pop that dang thing already cause its way to big! But my main thought behind the gold bubble is that when we get an administration in office that makes government small again (hopefully it happens but it seems like that part of government has left us ) we will get economic growth in the private sector which will increases the dollar. People are buying gold in such large quantities because they don't know which direction this country (and world for that matter) are going in. We need to get some stability for more than a week and allow every one to relax for the first time in the last few years.

Yes, but care is required when popping any bubble. Unintended consequences can be devastating to various groups and also to individuals. It is usually safer to find a way to deflate these over time, rather than just letting (or causing) them to go "BANG!".



Well, for one thing, for there to be a bubble, there HAS to be widespread ownership of whatever it is that is in the bubble and a very rapid increase in prices... think Internet stocks in the late 1990s or houses in 2004-2007. When everyone and their uncle is talking about and buying gold, THEN we will be in a bubble. I know a lot of people... perhaps hundreds... and only 1 of them owns any gold other than some jewelry. The one who does has 1 Mexican 50 Peso Libertad coin. To me, this means that gold ownership is not widespread, ergo no bubble. Rising in price alone does not a bubble make.

Also, there are a lot of politicians out there who TALK a lot about smaller government but those who will actually deliver on that promise are very few and far between. Politicians want power and influence. They get these by spending other people's money, not by saving it. It goes against their very nature to do more of what makes them less powerful and influential. If, by some miracle, we were to get a smaller less costly government, THEN we would very likely see increased economic activity, rising stock prices, a stronger dollar, and weaker PM prices. The odds do not seem terribly in favor of that happening any time soon, however.

Without having read any responses, this is my own input (from an idiot).

It depends on how liquid he wants his investment to be. If he's expecting gold to steadily climb in the years, then go with the American Eagle or Canadian Maple Leaf (stick it in the safety deposit box for a rainy day). Personally, I would go with the St. Gaudens $20 gold piece at MS-63. To attain this grade I would go to a VERY reputable dealer and pay the extra they deserve than to buy it on the http://www. This route may give you more enjoyment in the hobby and as more get melted they will get rarer. If you consider it as paying "extra" then maybe this route isn't for your dad and he should go for bullion because that's what he's basing the price on, but you did say COIN as an investment, so... I would venture to say he should get a semi-key if he doesn't consider it to be paying "extra".

(My Two Cents. I'm in the camp that thinks bullion coinage isn't really coinage, but bullion in the form of a coin - backed up by governing forces - so in a way it's pretty secure in that way but it doesn't exactly circulate in the marketplace in the same way that your quarters do.)

Be sure to buy the coin, not the grade. I saw an MS-64 St G. tonight asking $1950, but I wouldn't touch it. Everything looked beautiful except a nick in the upper chest area. I also think an AGE or buffalo much closer to spot isn't such a bad thing. A major question about the investment strategy is, timeline?

, Jimmythegeek!