Skip to main content

Can we be sensible?

I am a big fan of the Kitco website. When I need a quick bit of information regarding the price of precious metals or historical information, that is where I go.

In recent weeks I have been seeing pop-up ads from conventional financial firms there.

Aren’t gold and silver alternative investments?

What are companies my father would have used, or that I would for my traditional retirement investments, doing advertising on a precious metal website?

Are they looking for defectors who no longer believe in $5,000 gold and $100 silver?

Or is this the spearhead of an effort leading to sensible investment diversification?

When gold and silver were flying high, Wall Street invented exchange traded funds to make speculation in gold and silver just a phone call away to any traditional broker. This was smart money diversification.

The process can work in the other direction. Bullion money can head to Wall Street. It probably should work this way. Diversification benefits anyone who undertakes it. This includes hard core gold and silver investors.

Peak bullion prices from 2011 are receding further and further into the past. As 2016 dawns, it might behoove bullion investors to see what their counterparts in 1985 were thinking.

That year was also five years after peak prices.

Coin collectors had divorced themselves from dependence on bullion. The Morgan silver dollar boom was under way. The advent of commercial third-party grading services in 1986 added a jet pack to those Morgan prices.

Numismatically, they were very good times indeed.

Something similar will happen again.

Coin collectors will once again come into their element with less distraction from bullion.

In the meantime, there will always be those individual who will continue to wait for financial Armageddon. They were there in 1985. The $850 gold of 1980 was just the beginning, they declared.

They might be right. Eventually. It is just a matter of the timing.

Perhaps we are more likely to see $850 gold again before we see new highs.

All I know is that my hair is a lot whiter now than it was 35 years ago.

I can still enjoy a numismatic boom.

The next bullion boom? With sensible diversification, I can benefit.

I certainly won’t bet all my conventional retirement funds on it.

Besides, I would rather focus on collecting coins.

Buzz blogger Dave Harper has twice won the Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper "Numismatic News."

• Like this blog? Read more by subscribing to Numismatic News.