When it comes to making important decisions about how one invests, it is natural to look to a source like the world's central banks to see what they do. Those who do this notice they hold a great deal of one hard asset in particular: gold. These banks are run and staffed by people who know the value of the yellow metal as well as silver. They have years of real-world experience where they are required to carefully determine asset values. They do this in order for their institution to remain stable regardless of how their respective governments may blunder when it comes to the economy. In terms of liquidity, coins made from a precious metal can still be spent decades or even centuries after they were minted, but the same is certainly not true for paper currency. This alone is a very strong signal to investors who are looking for long-term financial security versus hopping from one investment to another hoping they sell off their assets before the next drop in value occurs.
Journalist Peter Cooper argues that looking at an asset like gold means looking closely at its intrinsic value which does not change the way paper currencies or stocks do. Silver is much the same, though its value is currently lower per ounce, offering the same type of real world intrinsic value that is high compared with the amount of space it takes up. Coins are an excellent way to store this value for the average investor. "Inflation, deflation, the gold will be there, and you can say pretty much the same about silver which has been used as money for centuries," he notes. "Find a silver coin from the Middle Ages and you can still spend it."
Elaborating, Cooper explains that during times of economic crisis inflation can cause cash to be worth little and that stocks also dwindle in terms of their value. For long-term investors, this is a nightmare they do not wish to experience and one that is easy enough for them to avoid thanks to precious metals, a hard asset that is both easy to liquidate and efficient in terms of the space it takes up. Commodities such as grain, oil, real estate or fine art require far more space and maintenance, making them perhaps profitable during good times, but also difficult to sell if the economy collapses.
Investing in hard assets like precious metals is not only about long-term security. It’s about having the money when it comes time to buy other assets.
This buying power is such an important point because most investors want to increase their wealth over time, regardless of economic circumstances. Gold and silver coins are one way they can do this effectively. That is why so many are building collections and learning about coins these days - they realize they have multiple layers of value worth holding onto.