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Blanchard and Company, Inc. is the largest and most respected retail dealer in rare coins and precious metals in the United States. We have helped over 450,000 people just like you with expert consultation and assistance in the acquisition of American numismatic rarities and gold, silver and... More
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  • Gold Coins Are Among The More Profitable Collectibles

    Vintage cars, fine wine, stamps, and gold coins (NYSEARCA:GLD) are among the collectibles that have yielded higher returns than stocks over the past decade, according to The Economist.

    Photo by Maura Teague

    The Economist has created a so-called "valuables index" for collectibles over the past decade, and the results are impressive. Among the big gainers: fine art jumped 36%, classic cars rose 25%, coins climbed 17%, and wine gained 10%.

    Coins (green line)

    Coins (green line) compared against MSCI World, The Economist valuables index, and individual valuables. Image courtesy Blanchard and Company, Inc. based on data from The Economist.

    Big Gain for Valuables Index

    "Our index has shot up by 211% in nominal terms since 2003 and by 54% since the first quarter of 2009," The Economist says. "In comparison, the MSCI World, a rich world stock market index, has increased by 147% since 2003, including income from dividends."

    Even so, the comparisons may be skewed by the fact that stocks plummeted during the financial crisis in 2008 and 2009 and have only recently recovered to hit fresh records.

    Shying Away From Stocks

    The Economist notes that distrust of financial markets is what helped spur more buying of collectibles in the first place.

    There's another factor that investors should consider as well. Buying and selling stocks is easy to do and relatively inexpensive. Investing in collectibles adds a host of other costs.

    "Valuables have high transaction costs and need to be insured, stored, and maintained," The Economist says.

    Tying up Your Money

    "Illiquidity is another problem," The Economist says. "Most funds lock in investors' money for at least five years. Those wine funds that do allow quick redemptions invest in the most traded grapes, like Bordeaux."

    Still, collectibles can be a good way to diversify your portfolio -- and can pay off over the long run.

    Source: "Fruits of passion: Investing in luxury items can yield high returns. The risks are commensurate," The Economist, August 17th 2013.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Blanchard and Company, Inc. is the largest and most respected retail dealer in rare coins and precious metals in the United States.

    Dec 12 4:03 PM | Link | Comment!
  • Gold Coin Sales Get Boost From Government Shutdown

    Worries about the government shutdown in Washington prompted more investors to buy gold (NYSEARCA:GLD) coins in October, putting overall sales on track to beat last year's totals, Wall Street Journal reporter Tatyana Shumsky says.

    Gold Coin

    The U.S. Mint, which sells gold and silver coins to the public through authorized dealers, sold 48,500 ounces of American Eagle gold coins last month, more than triple the September total but less than the 59,000 ounces sold a year earlier.

    So far this year, the Mint has sold 752,500 troy ounces of gold coins, just short of the 753,000 ounces for all of last year, Shumsky reports, citing the Mint's data.

    Government Shutdown

    The October surge came as the federal government partially shut down for 16 days because of the fight in Congress over the budget and raising the debt ceiling.

    "We saw our peak order volumes right before the government shutdown, and then again right before the deadline for the debt-ceiling increase," Mike Getlin of Merit Financial, a bullion dealer, told the WSJ. "The debates in Washington spooked people about holding dollars, and that drove up demand for bullion coins."

    But Congress only agreed to a temporary fix, so the fight over government funding and raising the debt ceiling is likely to resume early next year. That could spur even more sales of gold coins.

    Plunge in Gold Prices

    Though gold prices have plunged 22 percent this year, demand for gold coins is climbing. Shumsky says analysts believe people who buy gold coins are investing more for the long term

    "People are just still very uncomfortable about the financial situation worldwide," Terry Hanlon of Dillon Gage Metals, an authorized coin dealer, told WSJ. "We still see very brisk sales when there are [price] drops in the gold market."

    Silver Coins Popular

    Silver Coin

    Demand for silver (NYSEARCA:SLV) coins has been even higher than for gold, in part because silver is less expensive. The Mint has struggled to keep up with the demand for silver coins through much of 2013, the WSJ reports.

    The Mint ran out of the coins in January and imposed limits on coin sales to its authorized dealers. Those limits remain in place.

    Source: "Worries Boost Sales of American Eagle Gold Coins,"
    The Wall Street Journal, Nov. 3, 2013.

    Images courtesy of the United States Mint, used under Fair Use: Public Domain.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Blanchard and Company, Inc. is the largest and most respected retail dealer in rare coins and precious metals in the United States.

    Dec 12 4:03 PM | Link | Comment!
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