I’m not a precious metals speculator, or anything.
But a long time ago, I bought some gold coins… Chinese Pandas, Candian Maple Leafs, American Eagles, and the classic S. African Krugerrands. I kept them in my “what if the world ends” kit: the same place I keep stuff like a supply of drinkable water, canned food, lanterns, and first aid supplies. Kind of silly, perhaps, but I figured these were things that wouldn’t fluctuate much in value, so I wasn’t likely to lose much money on them, and if, by chance, there WAS some major disaster in which banks were closed for an extended period of time, or currency was otherwise unavailable, these would be worth their weight in… well, you get the idea.
Well, gold has gone up in value quite a bit since I bought them. So much so that I can sell some of them for what I paid for ALL of them. I think it’s unlikely to go much higher; in fact, I think it’s very likely that the price of gold will fall soon. So wisdom dictates the obvious choice: sell some.
So I got them out last night… and looked at them… and I find myself highly reluctant to sell them.
How stupid is that?
Gold seems to have some sort of mesmerizing effect on me. I can’t believe I’m even having these thoughts. I should just be selling the damn things.
I think that your reaction is as old as human culture. Why do we prize gold? It’s pretty and shiny and satisfyingly heavy in the hand; it doesn’t tarnish or corrode; and you can turn it into jewelry. Colored bits of paper with the government’s imprimatur just don’t measure up to that tactile standard, even if they are, rationally speaking, more valuable.
When my grandfather died, he left a bunch of coins to his 3 great grandkids, one being my daughter. Among her inheritance were 5 American Eagle Proof Sets. I have no idea what he paid for the sets, but I sold all 5 in December for $5000. On one hand, I was very reluctant to sell them for her, but on the other hand, the money was to be used for her education, as my grandfather wished. Still, they were so pretty.
And just this week, my mom gave me a Bicentennial proof set that she’d been holding for me (we both forgot she had it) - Guess I need to find out what it’s worth and sell it for the kid, too. No gold in that set.
The thing that a lot of investors seem to forget is that coinage is art as well as an investment.
They should be pretty. They should be attractive. I lust after a number of Quarter Eagle coins, myself. And if I got them they wouldn’t be an investment, they’d be art. And a bit of “neener.”
So, sell half of them. Take your profits on that. But hold on to half as insurance against the inconvenience of a financial collapse, the reason you bought them in the first place.