Why should someone purchase a rare gold coin that comes at very high cost when they could just invest in plain gold instead? There are many reasons that investment in a rare gold coin is far more practical, and we’ll start with the one that has many people confused – the reason that gold is valuable in the first place.
Why is Gold Valuable?
Many people are curious as to the reasoning that gold is so valuable at all. After all, it is a metal that is not used to back many currencies (if any) and that means that its actual value could be mostly theoretical. Because so many modern national currencies are what we call “fiat” or faith based currencies, it means that the value of a piece of paper currency is based on many things, but not often on any actual, hard asset backing.
So, gold and silver fluctuate in the markets based on the different trends in the economies around the world. Investors have gotten into the habit of placing a lot of value on gold as a sort of safe haven asset, but it is by no means a sure thing.
The Superiority of a Rare Gold Coin
Now, a rare gold coin is actually a sure thing. This is because it is not valued based on the precious metal it contains. While this certainly does give it one layer of value, the most pronounced value comes from the fact that the rare gold coin exists in very limited quantities.
The range of conditions that a rare gold coin might exist in can also give it value. For instance, a coin that is rare and uncirculated is in prime condition while one with a lot of wear and tear is going to have lower value. This is not always a universal truth, however, because coins that are extremely scarce, old, and rare tend to have high value no matter what.
Unless a rare coin is somehow damaged or destroyed, it does not ever decline in value as an investment. This sets it far apart from plain gold bullion or newly minted coins since these fluctuate widely in value based entirely and exclusively on the markets.
For instance, if you buy a fifty dollar gold coin that is newly minted and one that has the same face value but is a rare coin from many decades earlier, that bullion coin can easily go up or down in value. The rare coin, on the other hand is only going to hold its value and slowly climb in value over time.
Think about what this means to your portfolio. Not only are you able to sink capital into something that holds the value of the funds used to purchase it, but you know without a doubt that it will increase in value over time.
Now, there is no doubt that it won’t climb as rapidly as some riskier investments such as plain bullion or classic stocks. However, if you want stability in a time when turmoil seems to be the new normal, then rare coins are a wise choice.
Choosing gold coins is also wise because they do have that substantially higher secondary value from their gold contents. This may be only an intrinsic value that does not play much of a role in the overall performance of the rare coin investment, but it is still something to consider. Many people pursue gold coin collecting and many want to purchase gold coins simply because of the metal. Making this choice for your portfolio guarantees stability, but you can also guarantee a good return by choosing gold.