16 January 2010

Alternative Investments Pick Up Speed

Global concerns about the future of the stock market have investors looking for new ways to round out their portfolio. The old method – investing in mostly stocks and a few bonds – has proven to be downright frightening. It used to be that investments in commodities and hard assets were boring, but they added stability, so investors would devote just a small fraction of their wealth to them. However, if you were one of the few who were well diversified in precious metals and hard assets like certified coins in the first decade of the new millenium, you were one of the few to not come out hurting.

The stock market was once the only sure way to make double-digit returns on your money, while safer investments were for losers. However, the housing bubble and recession forever changed our view about volatile stocks. Alternative investments are the new trend, because mainstream stocks have proven to be wholly unreliable.

The investment landscape is going through sweeping changes for several reasons. With concerns about the mounting deficit, which is in the trillions, professional and casual investors alike are worried about the value of the dollar. Hard assets like rare and certified coins seem like more valuable investments, because they won’t devalue to zero, the way some stocks may.

At least investors are becoming more guarded and smarter when it comes to building wealth. People are more realistic about their retirement goals and are looking to preserve their wealth and make profit slowly over time. The days of easy money are over. If you are one of those investors who are cautious, metals and rare coins offer profit potential that does not depend upon the value of the dollar.

How do you choose what kind of rare coin to buy? That’s simple: buy the best one that you can afford. High-quality coins will always have buyers. Low-quality coins will not appreciate in the same way.

Also, know that finding a “steal of a deal” or a bargain is not realistic. It is realistic, however, to find a coin that is priced at its fair market value. Of course you want to “buy low” and “sell high” – but that doesn’t mean that there are high-quality coins on clearance. Focus on buying the best coin you can, and let time handle the rest. Time is your best friend when it comes to certified coins.