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Intelligent way to own gold

Banker J.P. Morgan was once asked what the market would do by an eager reporter hoping to get the inside scoop.

The great man’s reply was, “It will fluctuate.”

What else could he say?

Here was someone who had formed U.S. Steel, the first billion dollar corporation the United States or the world had ever seen.

He was called on for a massive loan to stem financial panic in 1893 when foolish U.S. monetary policies drained the Treasury of gold.

His views were respected in both business and government. If anyone could make a correct forecast, wouldn’t it be him?

It is clear from reading gold investment letters that many writers have no such reticence.

Had they simply sent out their letters with the word “Up” for the last 11 years, they would have been right. But they would not have had any subscribers.

If Morgan’s response had been put into an investment advisory letter, it too, would likely have no readers.

Readers seem to want elaborate stories that inspire feelings of being on the inside, yet the more specific the forecast such as what gold will be on a certain date, the greater the likelihood it will be wrong.

Fortunately for many coin collectors, they have a self-imposed mission of collecting gold coins that will be rewarding for them over the average collector’s span of activity, which is usually more than 20 years and often is much longer.

Their narrative is a numismatic one. They write their own story about gold.

The records these collectors leave behind show that they don’t need to know what the tax rate on gold in India will do to demand. They simply know that gold is a good place to be and if they systematically put a gold coin collection together, they will be very much better off at the end of the process than they were at the beginning even if bullion fluctuations turn against them.

Starting a gold coin collection now might just expose the collector to a bullion market downtrend sometime in the next 20 or 30 years. But at the end of that period in 2032 or 2042, the only bullion investment advice they will have needed is the word “Up.”


It is the most intelligent way to own gold.

Buzz blogger Dave Harper is editor of the weekly newspaper "Numismatic News."