Coin collecting as an inflation fighter

Here’s a blog entry discussing the use of rare coins to fight inflation. The example given is an investment of $1,000 in rare coins in 1970. On average, they would be worth over $57,000 today. That’s a 10.98% APY, and I thought I’d reach the same conclusion as when I was asked about setting aside coins to save for college, but this is a different result.

In this case you would have made out better with rare coins. If you had invested $1,000 in the stock market in 1970, which has averaged around 10%, you would have just shy of $40,000 today. Of course, when it comes time to sell your coins, you may be in for a rude awakening. Just because the coins are worth $57,000 doesn’t mean that’s what you’ll get for them. If you put them up for auction, you have to pay a commission, and if you sell them to a dealer you’re not going to get the retail price for them, but you’d still probably come out ahead of stocks. One benefit of stocks is that it’s easier to sell them, but in this case, coins win as the better investment.

Be forewarned though, as you hear with all investment advice, past performance is no indicator of future results.