Monday, April 10, 2006


I was cleaning up a bit and found some silver coins I have and a rather small vial of gold.
Gold, and metals in general, have been surging lately and today I spent a little time reading up on gold and silver coins as an asset class. I've been thinking about different asset classes lately because right now I'm in cash and stocks. I've been interested in coins because my dad has a small collection, but I never thought of it as another form of diversification.

The best article I came across of today is this one. It's rather in-depth and it had some surprising statistics. I never new that the annual average return was around 10.5% (based on their studies), but what was also surprising is that the overall returns had a standard deviation of 12.3%
Stocks generally have standard deviations that are a little higher, so coins seem to be more stable.
Another interesting point is that from the start of the study till the end, there were only a few negative years with the worst being down 7.4%. The best year had a return of +48%
I'm not exactly sure how the study was set-up so it can be skewed. For instance, it might only be looking at the rare coins that are put up for auction. It might also be focusing on a limited amount of coins or certain issues. I'm going to try to look for other studies that will back up these figures, and if I do I'll post them.

Added one new link

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