• Portfolio Diversification… A Winning Strategy
      Own multiple asset classes for higher returns and lower risks.
• Certified vs. Bullion
      Why is all Gold not equal?
• Rare Coin Basics
      What makes a coin Rare?
• Grading Scale
      Quality increases a coin’s value.
• Legacy Program
      Increase wealth for your heirs.

How to Invest in Gold Coins or Bullion

Diversification is a strategy designed to manage overall risk.

Assets are divided into "Classes." Two assets that respond in the same way to economic changes are said to be "Correlated." Two assets that respond differently to economic changes are said to be "Non-Correlated."

Stocks and Precious Metals are two different asset classes. Each class has its own advantages and disadvantages, but a diversified portfolio makes you less dependent on a "Single" asset class for overall performance.

When stocks and precious metals are combined into a single portfolio, a "Non-Correlated" asset is created. The "non-correlated" relationships of these two classes are ideal partners! When Gold is rising in value, stocks are generally falling in value, and vice versa.

The following charts illustrate the benefits of diversification

In January of 2001 Bob, Mary, and Steve each had $50,000 to create a portfolio.

Bob takes his $50,000 and acquires five of the most widely held stocks. Bob puts $10,000 in each of the five following stocks: AT&T, Citigroup, G.E., Johnson & Johnson, & Merck. Since all of Bob's assets are in a single "Class" (stocks) he has created a "Correlated" portfolio. After five years and rising interest rates, Bob has experienced a $6,000 LOSS! The value of Bob's portfolio is down 11% to $44,000.

Mary wanted to diversify her portfolio by owning "Two Classes" of assets (stocks & gold coins). Mary acquired the same five most widely held stocks: AT&T, Citigroup, G.E., Johnson & Johnson, & Merck. Mary put $7,000 into each of these stocks. Mary was left with $15,000 to put into Gold coins. By doing this Mary created a "Non-Correlated" portfolio.

Invest in Gold Coins

Mary purchased 55 one-ounce Gold Eagles (non-certified bullion coins) in January of 2001 @ $271 per coin. By January of 2007 bullion prices reached $623 per ounce. Since Mary had 55 ounces of Gold she saw the value of her bullion go from $15,000 to $34,265 which offset the losses her stocks experienced over the same five year period. After five years and rising interest rates, Mary experienced a $12,294 GAIN! The value of Mary's portfolio has increased 30% to $62,984! By creating a "Non-Correlated" portfolio, Mary avoided the 11% losses Bob experienced and had a 30% gain.

Steve also decided to diversify his portfolio by acquiring "Two Classes" of assets (stocks & certified Gold coins). Steve also acquired the same five most widely held stocks: AT&T, Citigroup, G.E., Johnson & Johnson & Merck. Steve put $7,000 into each of these stocks. Steve like Mary, was left with $15,000 to put into precious metals and also created a "Non-Correlated" portfolio. However, Steve invested in Certified Gold coins.

Steve acquired 17 of the 1914 $20 one ounce Gold pieces certified Mint State 63 PCGS certified. There are only 529 of these coins in a Mint State 63 condition in the entire world. This fixed low supply was the key to increased value. As the demand for Gold grew, the law of supply vs. demand took over. The value of these coins increased from $850.00 per coin in July 2001 to $2,990.00 per coin in January of 2007. These prices are actual prices paid for these coins at auction. Steve saw the value of his $15,000 of Certified Gold Coins increase to $52,764 for an increase of 351% over the 5 year period. After five years and rising interest rates, Steve’s diversified portfolio of falling stocks and rising Certified Gold Coins experienced a $31,907 GAIN! The value of Steve's portfolio has increased by 64% to $81,907!

The main factor that determines which classes move up and which ones move down is "Interest Rates." Luckily for us, interest rate cycles are long and slow-moving, giving us plenty of time to make adjustments. These cycles tend to last 15-20 years before reversing.

Recent Examples of Interest Rate Trends

• 1960's - 1980's Interest Rates were rising
                         Gold rose from a low of $35 to $875
                         Stocks struggle to perform
• 1980's - 2000's Interest Rates were declining
                         Gold struggles to perform
                         The Dow rose from 759 to 11,750
• 2000 - Present Interest Rates are rising
                         Gold has risen from a low of $250 - $1150
                         Stocks struggle to perform

Having more Gold and fewer stocks in 1960 to 1980 was a winning combination. However, that trend reversed in the 1980's. Having more stocks and fewer Gold coins from 1980 - 2000 was the winning strategy.
We are currently at the beginning of a new "Interest Rate" cycle. Combining these two "Non-Correlated" assets (stocks & Gold coins) will help increase the performance of your portfolio and help lower your risk!

We have now learned that the asset class and interest rate trends are two important investment factors.

It is important to recognize not every certified coin performs the same way. Having a professional that knows the rare coin market was the key to Steve's success. The key is finding the right rare coins to diversify your portfolio with. Our research department is continuously analyzing market trends, population reports, mintage figures, conditions, and past performance of all rare coins so that we can serve our clients’ interests best. Call us at 1-800-775-3504 and speak with one of our experts. Let us hand select a portfolio for you today.

As an asset class, rare coins have outperformed conventional assets such as stocks and bonds. A broad rare-coin index, the PCGS3000, is up 23.6% in the past 10 years. By comparison, the Dow Jones Industrial Index was at 11,723 at the beginning of January 2000 and, as the graph below shows, it is at 10,779 at the time this is being drafted (03-19-2010). So, if you had been a "long-term investor in the stock market, your investment is actually lower today than it was 10 years ago. How's that for return on your investment?

Now, it's important to go a bit into more details about two very important points that are critical for individual and institutional organizations considering purchasing rare coins:

• Understand your time frame
• Work with a reputable dealer

Know your time frame:

The "population," as it is called, of any particular rare coin issue is essentially static. The population of people, however, grows. More people create the potential for more coin buyers and collectors. Ultimately, more buyers and collectors competing for the same limited number of coins leads to the steady increases in values we've described.

As with stocks, bonds, real estate, and other investment classes, while the long-term direction of the rare coin market is up, there are peaks and valleys along the way. If you are an individual investor planning on retiring in 20 or more years, or you are building a legacy for your children or grandchildren - and you can rely on other assets to take care of any needs for cash that might arise - you are ideally positioned to benefit from the long-term tendency of rare coins to increase in value. A good strategy for you would be to buy and hold. You could purchase all the coins you intend to own now, or plan to invest a given amount each year. With a perspective of two, three, or more decades, the direction and level of the current market would be of little concern to you. Nor would it be critically important to select "hot" coins that are likely to appreciate the most within the next year or two. No one knows what the hot coin issues will be several decades out, so you would be well served to assemble a broad range of quality rare coins.

Review the 10 year PCGS3000 chart below. If you had bought your coins in 2000, you'd be 10 years into your hold period, and be very pleased with the increase in value of your coins today. Conversely, if you'd invested in the stock market, your investment wouldn't have gained a penny - in fact, you would have lost money.

Work with a Reputable Dealer:

With certified coins, as with other asset classes, you should know our goal, including your time frame. And, a reputable dealer will assist you with your specific goals. How do you know if you are dealing with a "reputable dealer"? Well, one way to tell immediately whether or not the dealer is concerned with your goals is whether or not they "ask" you questions, before they "tell" you what you need to know.

At the United States Gold Bureau, our experts have decades of experience in the industry, and we're in this business for the long-term. So, you when you call us, you should expect that you will be treated well and your specific goals will be listened to carefully. Tell us what you're trying to accomplish in the certified coin market, and we'll help you get there.

Dow Jones Industrial Index - January 2000 to March 2010

PCGS3000 - January 2000 to March 2010

USGB Recommendations:

Diversify your portfolio with Platinum - and, as always, do it with the best quality, most rare type available - W Proof 70 coins.

Sign up today for a year subscription to The Gold Monitor to learn:

Top 10 mistakes people make when buying gold

1. Looking for a cheap price!
2. Dealing with multiple dealers.
3. Short term expectations.
4. Basing gold markets on stock markets.
5. Lack of education.
6. Not understanding premiums over Gold Spot.
7. Knowing how much to invest.
8. Not understanding Gold's value.
9. Owning gold stock or ETF's instead of the Physical metal.
10. Buying bullion instead of Rare Certified Gold.

10 things gold dealers DON"T want you to know.

1. How dealers make money buying gold from you.
2. The Value of History
3. The value of Supply
4. The value of Condition
5. The Value of a reputable Grading Company
6. Dealer mark up's
7. How to make money selling your coins.
8. Which coins go up in value the fastest?
9. The difference between common date, semi-rare date and rare date coins.
10. Why age of a coin does not determine its rarity

Making 1 of these mistakes can easily cost you 10's of thousands of dollars. Educating yourself before you buy gold will allow you to move with confidence and avoid the nightmare stories you have heard about owning gold. The normal price for a 1 year subscription to "The Gold Monitor" is $1,495.00. You can sign up and receive a 1 year subscription to "The Gold Monitor" absolutely free!

Privacy Policy

Free Silver

Click on the image to enlarge it

For a limited time the United States Gold Bureau is also offering new subscribers (1) Silver Buffalo for FREE. You only have to pay $9.95 for shipping and handling. This is a limited time offer, so sign up today.