Why Not Gold?
By Dr. Sol Taylor
As any investment counselor would tell you, "Keep no more than 4 percent of any one asset in your investment portfolio."
The usual arguments against even keeping gold bullion or coins in an investment portfolio vary but include these common elements:
Gold makes a fine gift for a special event such as a golden anniversary or a birthday. As a youngster many years ago, my bar mitzvah gifts of choice were a few $2.5 gold coins from various relatives. An equivalent share of stock would have been much less appreciated although perhaps some stock would have done exceptionally well over the next 60 years.
Aside from gold bullion coins and ingots, there are numismatic gold coins that is, coins of rarity well above their gold value. In fact, among the highest value of all coins, the royalty include the 1933 double eagle ($20 gold piece) at $7.59 million and the Brasher doubloon and 1927-D double eagle at more than $1 million each, and at least a dozen other gold coins passing the $500,000 mark in recent auction sales.
For those gold coins of more modest value but well over their $1,000-per-ounce metal value, almost all uncirculated U.S. gold coins fill that niche, while many scarce and rare dates easily rise into the five-figure range.
With gold in the news, many people will decide to unload their family gold jewelry while others will stock up of gold Maple Leafs, U.S. Gold Eagles, Krugerrands and other forms of gold bullion. In a conversation with a coin dealer Tim Lenk at Goldcoast Coin Exchange in Woodland Hills in early March, he stated, "It hasn't been this busy since late 1979 when gold approached $1,000 an ounce and silver passed $45 an ounce. ... When the dollar falls, gold rises accordingly."
Dr. Sol Taylor of Sherman Oaks is president of the Society of Lincoln Cent Collectors and author of The Standard Guide to the Lincoln Cent. Click here for ordering information.
©2008 SCV COMMUNICATIONS GROUP & SOL TAYLOR · ALL RIGHTS RESERVED.