If Gold Is “Just a Rock,” Why the Rush?
As uncertainty drives investors toward precious metals, collectors should remember that market excitement—and prices—can cool just as quickly.
Financial expert and radio personality Dave Ramsey has often cautioned his audience regarding owning gold. Ramsey correctly describes it as a rock. He also points out that you can collect a dividend from stocks, but you can’t collect a dividend from gold. Obviously, he isn’t what we might call a “gold bug.” This begs the question: since his observations are correct, why is there so much interest in gold and silver composition coinage right now?
What we are experiencing is a flight to a traditional safe haven during a period of uncertainty. We’ve experienced these before, and we will again at some future date as well. Once the financial markets finally steady themselves, many of the speculators we now see rushing into coin collecting due to the intrinsic value of so many coins will once more be gone. The good news is that some of these individuals will become interested in coin collecting or in becoming serious investors in rare coins. The bad news is that once the demand is over, the prices will reflect this changing trend.
If you read this column, you are likely an active collector, not a speculator. You aren’t concerned about gold or silver being rocks, as you may be cautioned by financial experts, but you are still concerned about the future value of your collection. I’m not suggesting we will, at some future date, see the price of collectible coins plunge, but I am suggesting being careful about just how much you are willing to pay to add something to your collection when the market gets frothy. Much of the froth in the current market has to do with outside economic forces. Identify and watch these forces to ensure what you add to your collection will prove to be truly collectible, not just something of vulnerable intrinsic value.
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