It is not uncommon to hear about people hiding Rare Gold Coins. In early October 2010, IRS Agent Jack Bumgardner dug up gold and silver coins estimated to be worth $200,000. This action was a part of the continuing probe into the tax evasion activity of Edward K. Eastwood, a Greeneville nurse anesthetist. More and more people are trying to horde gold coins as the prices have been continuously rallying since 2002. After the financial crises of 2008, many investors have been preferring gold as an indispensable part of their investment portfolio.
Some Facts about Rare Gold Coins
A study, which was originally carried out for the Joint Committee on Taxation of the House and Senate, concluded that purchasing rare gold coins could make a better hedge than other forms of gold investment. Rare gold coins also yield better returns showed the study. A Penn State professor of Economics, Raymond E. Lombra, conducted the study that covered a 28-year period and formed the investment basis for legislation issued by the Congress. The report concludes:
- Rare gold coins make a better inflation hedge than other gold assets.
- In periods when gold prices were crashing, rare coins made considerable profits. For instance, although gold price fell to $360 from $500, rare coins shot more than $100.
- Rare coins make a better inflation hedge than other gold investments against decreasing prices for bonds and stocks.
- Rare coins yielded almost 100% more than what was yielded by gold in the best year.
- The average yearly return on rare gold coins was over 200% higher than that from other forms of gold acquiition.
Authentic rare gold coins that are appropriately priced and selected are likely to become sound long-term investments as shown by investment studies. It has been historically proved that rare coins help in considerable capital appreciation and are a reliable measure of asset protection during times of inflationary cycles and economic disruption. In the last sixty-two years, rare coins have yielded high returns as concluded by the Chief Investment Officer for GE Private Asset Management, Inc in a study. He also showed that a small allocation enhances a well-diversified investment portfolio.
Considering that rare coins are limited in supply, the value of a rare coin goes upward as its demand increases. When one acquires a rare gold coin, they are expecting the value to rise with time. Whatever one invests in, the speculation is always that they believe its value will rise in over time. The rarity premium and gold content of certified rare gold coins also have the prospect of higher returns with the passage of time.
Should You Prefer Certified Rare Gold Coins to Stocks?
Many experts have indicated through statistics that certified rare gold coins have made better profits at times than stocks. However, the truth is that to make your portfolio robust enough you should be well diversified (considering your risk threshold). It has been observed that during good economic times, investors tend to prefer the equity market, while during bad economic times it is considered a more safe haven with rare gold coins.