How to Buy Gold, Part 1: Gold Coins
Stockpiling gold has been a favorite investment of the wealthy throughout history, and the gleam of gold is still irresistible to many investors today, with gold being the most popular investment out of all the precious metals Some people like that gold is a tangible asset that will retain its value even if paper currency loses its value, while other investors are attracted to the liquidity of gold. For many, gold is a way of riding the inherent economic ups and downs, with gold serving as the "only real hedge against the massive financial excesses that still prevail in the western world." Moreover, gold is fungible, liquid, portable, and accepted anywhere in the world.
This is the first article (in series of articles) describes how and why invest in gold coins.
Gold Coins: Historic (pre-1933) gold coins tend to retain the most value, as these have numismatic value in addition to their gold content. Examples of historic gold coins that do not sell at an excessive premium over the gold price because they only contain 90 percent gold are the British sovereign, British guinea, Spanish and Spanish colonies (Columbia, Peru, Chile ...) escudo , French 20 and 40 francs, Swiss 20 francs; and American gold Eagles ($10 face value), Half-Eagles ($5 face value) and Double Eagles ($20 face value). The British sovereign Gold Coin are notable exceptions with 91.66 percent gold content, or 22 Karat. Other gold bullion coins include the Canadian Maple Leaf, the Australian Kangaroo, the South African Krugerrand (which sparked the entire gold coin investment industry) and the 24 Karat Austrian Philharmonic.
Why Numismatic Gold?
Numismatic gold provides security and peace of mind.
As hard assets, numismatic gold coins have historically provided their owners with a hedge against conditions which cause paper investments to decline in value. This was true during the Great Depression, during the high inflation of the 1970s and during the recent subprime real estate crisis.
Numismatic gold coins produce exceptional returns for their owners
President Franklin Delano Roosevelt ended the regular minting of gold coins in the US way back in 1933. As a result, the supply of numismatic gold has been static—and even declining due to wear and loss—for decades, while demand has increased. Declining supply combined with increasing demand creates true appreciation potential.
Numismatic gold coins help you protect your personal financial privacy.
In this day and age, more and more Americans wish to preserve as much of their personal financial privacy as possible. Numismatic gold helps in this regard because numismatic gold coins require no broker reporting at the time of acquisition or liquidation. Nor are you required to provide your social security number when you purchase or sell numismatic gold.
Numismatic gold coins can help safeguard your gold holdings against government restrictions on gold ownership.
Many people do not realize that in the US, private ownership of gold is not considered a right. In fact, in 1933, during the regime of President Franklin Delano Roosevelt, a law was passed ordering all owners of gold to turn that gold into the US Treasury and it was illegal to own gold in the US from 1933 to 1974.
During this period, some Americans chose to own gold stored overseas and, in 1963, President John F. Kennedy issued an executive order declaring that illegal as well.
In 1974, gold was “legalized,” but the law that legalized private ownership of gold left it at the president’s discretion as to whether it would be in the best interests of the country to allow private citizens to hold gold and, at any time, by mere executive order, the president retains the authority to outlaw the private ownership of gold and confiscate the gold that is in private hands.
This is where the advantage of numismatic gold comes in to play. Numismatic gold coins in the past have been specifically exempted from the laws and regulations pertaining to gold confiscation. This makes them an extra-secure way to own gold.
Numismatic gold coins are a fabulous way to diversify your investment portfolio.
Just about everyone is familiar with the old saying “don’t put all your eggs in one basket.” This axiom definitely applies to investing. Diversification is one of the keys to long-term success. The key to true diversification is to have a mix in your portfolio that do not share characteristics. Numismatic gold is especially useful because these coins tend to move independently of paper investments, such as stocks and bonds. This makes them a great way to diversify your portfolio.
Numismatic gold is liquid and marketable.
Because of sight-unseen trading of certified rare coins, numismatic gold is one of the most liquid collectable investments of all. And, with a network of dealers from coast to coast, major coin shows across America throughout the year and a large and growing collector base, numismatic gold coins are also marketable; in other words, you can usually find a buyer so that you don’t have to “take a bath” if you need to sell.
Numismatic gold has real, tangible value you can literally feel in your hand.
Unlike paper investments, no one can ever say of numismatic gold that it isn’t worth the paper it’s printed on. Since they were minted from real gold mined right here in America in previous centuries, each numismatic gold coin also has intrinsic value, no matter what happens to their numismatic, or collector, value.
Numismatic gold coins are easy to own and easy to move.
With numismatic gold coins, you can concentrate a great deal of wealth in a small package and, if necessary, transport that wealth discretely. Try that with other tangible assets, such as real estate, art, or even classic cars.
You do not have to be rich to own numismatic gold.While there are many wealthy coin collectors and investors around the world, it is certainly not necessary that you have a great deal of accumulated wealth to own a nice collection or portfolio of numismatic gold coins. In fact, you can get started with just a few thousand dollars.
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