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Joe101

Converting savings into gold coins

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I am new to coin collecting and would appreciate some help in starting my collection by converting some of savings into gold coins. I am thinking of a hedge against inflation and having something physical. Looking for some good places to buy coins in Canada who are knowledgeable and trustworthy, good coins to buy: dates, finish, etc. I don't know enough about valuing numismatic coins so will look for something in gold with a low premium, that would be a good investment.
Thanks for any direction,
Joe

 

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Generally speaking, I don't comment on coins as investments as I consider it something to be enjoyed - investing in any field of collectible can be done, but is generally in very specialized fields / items.

 

Anything with a low premium (and/or relatively low value) for the most part is something considered by the field to be common, and as such is unlikely to appreciate on its own by much, if at all.

 

For example, a French 20 franc "rooster" piece is a lovely coin, can be purchased in mint condition at a modest premium over the gold value, but will always be just that.

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Thanks for the response.

At this point I am more interested in transferring money from savings into coins as a way to protect against inflation than anything else. When I get more knowledgeable I can look into coins as collecting.

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It is not advisable to pour all your money into coins / numismatics.

 

Depending on what you buy and how you care for it, there are chances that you may lose your money in it, especially if you don't care about it and let the coins tarnish. There is no 100% fool proof guarantee against inflation.

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Gold is an international commodity. All commodity prices are trending down just now.

Watch the gold / silver ratio trend, as well as beyond the current downturn in the World economy. Gold should be a better hedge against inflation after that.

In the last 50 years or so, there has been a downswing in the World economy, on average about every 8 years or so. In some of these downturns, gold has been countercyclical. That is, the gold price has been price in upturn, and a safe haven in times of trouble. In the current downturn however, gold has trended down as well.

 

So just be a bit circumspect in this downturn, before before investing in gold. Over the decades, I have seen lots of upturns and downturns in the gold price.

I speak from experience. My first gold coin (Sydney Mint Half Sovereign), was bouight when I was a teenager. That was 51 years ago. I still have it.

Currently, I have about 35 gold coins, with a high numismatic proportion in their value. One of them is an ancient Greek stater, of Philip11 of Macedon, Pella Mint.

 

Numismatically, I am NOT a specialist collector of gold coins. I see gold in coins as just another coinage metal, and as such, has a fully rightful place in any decent numismatic collection, but not to be revered.

 

An investment advisor one told me that not more than 5% of your investments should be in artworks and collectibles. In that case, that means 'coins' to me.

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Thanks for the reply.

Mainly I'm concerned about the state of world affairs. We see problems with Greece recently and I think this will go through most countries since all are in a lot of debt. If more money is printed to cover debts there could be a lot of inflation. I weighing this against the cost of gold and the price of the dollar. How would the price of the dollar at this point affect the purchase of gold and silver coins?

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Hedging against currency inflation with precious metals is a time-honored strategy. BUT you must be cautious because the spot markets are driven by mysterious means. Commodities are not for casual investors. I can still remember the Hunt Brothers. I made some money because of them and I was truly grateful. However a lot of people were on the buying end of that run-up and when the bottom fell out they got seriously hurt.

 

The split of assets is extremely important for a stable march to the future. People don't become rich this way nor are they likely to become instantly poor. Personally I'd research and find advisers I trusted. Never take advice from anyone who profits directly from what you do. Decide on the percentage of your holding to be in metals. Decide on the percentage in each metal. Find the correct source to purchase and several fast means of sale. You get the idea, I'm sure. Anyway best of luck with your plans.

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