For some people, coin collection is a mere hobby but for others, it’s a far more serious affair. Silver bullion coins make up a portion of most savvy investors’ portfolios. They are considered more secure than other options such as certain currencies or some stocks and bonds. Since inflation affects other investment tools it is reasonable to expect that it will also affect silver and gold bullion coins as well. Thankfully, for investors, this expectation does not reflect the reality as bullion responds differently to inflation.
Inflation – The Basics
Economists refer to inflation as the trend that reflects a rise in the prices of goods services and commodities. It is usually characterized by high prices and represented by an index. All of this has an impact on assets especially those used for investment purposes and to a lesser extent, silver coins, and other precious metals as well.
Coin Value – The Basics
Generally, the value of coins is dependent on the value of the substance used to make them (gold and silver for example). But desirability, craftsmanship, and age also factor in when coin prices are being established or adjusted. In fact, an established and very sophisticated system for grading coins has been developed and used by coin experts around the world. Coins with low mintage, for example, are likely to be rare and if they also happen to be desirable then the two factors work together to drive the price upwards.
The Role of Inflation in Coin Pricing
As you try to keep a pulse on the value of your silver and gold coins, remember that the value of each coin is highly dependent on how desirable it is. In other words, the more sought after a coin is, the more likely it is to increase in value. This is essentially the system of demand and supply that affects every other product or service on the market. Demand for coins increases when people have more disposable income. When people are able to pay their bills, handle all other obligations and still have money remaining for investment, they are more likely to purchase coins.
Inflation affects people’s spending power since when inflation is high people end up with less disposable income. This results in lower demand for items like coins and by extension a lower price. But the prices will never drop to the low levels that are seen with some other investments. Company shares, for example, can fall in value all the way to zero depending on the performance of the business. This is why investors strategize and try to predict the market, buying and selling their stocks at the best moment (when the value is high) while buying others at the optimum point (when the value is low). Gold and silver bullion coins, however, will always have an associated value and they have centuries of solid performance as value holders to support them.
Silver and Gold Coins in Your Portfolio
Your goal as an investor is to ensure that your portfolio of investments (stocks, bonds, savings, gold and silver coins, etc) increase at a rate that exceeds the inflation index. Most investment tools are at the mercy of inflation. They may lose value if inflation rises too high, but your silver and gold coins (especially the gold coins) tend to rise to create a stabilizing effect on your portfolio.
Silver and Gold Bullion Coins at Colonial Acres
Since your gold and silver coins are so important to your portfolio, you’ll want to ensure that safeguard your investment. Sticking to reputable dealers will go a long way in ensuring that what you purchase is authentic and of a high standard. Colonial Acres is ready to help you add valuable silver and gold bullion coins to your investment portfolio. The gold and silver bullion coins you purchase at Colonial Acres are ideal additions to your investment portfolio. They are authentic (each coming with its own serialized certificate of authenticity) and are of the highest quality.