Gold Bullion vs. Coin Buying: Which is a Better Investment?

For the traditional method of investing, people are asked to fill their portfolios with blue chip stocks and bonds, which will continue to rise in value year after year. This philosophy is perfectly acceptable when the economy is improving and the markets are stabilizing or expanding. Under these conditions, your portfolio will probably give a 5-8 percent annual return, which will give you a beautiful nesting egg for leisure.

But what happens in times of economic instability? When the bottom line falls from the market, an entire portfolio disappears in a matter of months – which is why the most intelligent investors diversify by acquiring gold. Precious metals have proven that they can maintain their value regardless of the ebb and flow of financial markets, making the metals market a very desirable option for stocks, bonds, mutual funds and even the IRA.

When it comes to buying gold, investors must decide which form they want to buy. The two main options are bullion (the metal consists of bars or coins, where the value comes from the price of the metal product) or investment grade coins (coins that have been certified for their age, condition and rarity, where the price is based. Independent of). Although both forms have their advantages, the average investor is not very experienced in commodity trading, it is better to stick with investment grade coins.

There are two reasons:

  • Low volatility. Since investment grade coins are not subject to the “spot” price of gold like bullion, their value is much more stable. It is driven by supply and demand. As supply remains stable (for example, 1848 coins are no longer being minted) and demand increases over time, the certified currency market has historically had much less volatility.
  • “Perfect timing” is not a problem. Many investors are leaning towards the precious metal to get out of the roller-coaster ride of the stock market, only investing in bullion has its own cyclical ups and downs. To make money, investors need to give the right amount of time and buy less and sell more. With investment grade coins, the market does not have the peaks and valleys of a commodity market, so investors can follow the “acquisition and retention” strategy and see the price rise over time.

While many may consider “hoarding” a hobby rather than a serious financial strategy, more and more investors are realizing that entering the investment grade coin market is an effective strategy that can protect and enhance wealth in the long run.