Should You Buy Platinum Proof Coins?
Usually, when people think about investing in proof coins, it is very easy to get into a slam dunk mentality. After all, what is there to hate about proof coins.
First and foremost, you are investing in precious metal coins. Investing in precious metals is a great way to protect yourself against inflation. Every passing year, the value of your money, whether it is stored in the bank or stored in the form of paper currency in your wallet or stored somewhere, goes down in value; that is the reality of inflation.
As the overall money supply increases due to government money printing, the amount of goods and services this paper money can buy goes down. This should not be a surprise; after all, paper money still follows the rules of economics. This is basic economics 101.
The higher the demand, as symbolized by the huge amount of paper currency floating around, and the lower the supply or, the more stable the supply is, the higher the price. As a result, inflation goes up.
Also, precious metals are great investment options to protect against market crashes or market uncertainty. Put these two together, along with the fact that proof coins have serious collector's value; then it may seem like you have a winning strategy.
For the most part, investing in gold proof coins, silver proof coins, and other proof coins made of precious metals seems like a good idea. However, just like with any other investment option, it all depends on why you are investing. It all depends on when you are investing. These little details can add up to lots of money either being made or lots of money being left on the table because you are forgoing other more locative investment options while hoping for your precious metal investments to appreciate with time. Keep the following factors in mind regarding investing in platinum proof coins.
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Riding the Rarity of Platinum
If you thought gold and silver are rare, you have not seen anything yet. In fact, platinum is rarer still. Platinum looks like very bright silver, and platinum has been dubbed white gold through centuries.
However, dubbing platinum as gold is really a disservice to platinum. Why? Platinum is much rarer than gold, and it is very hard to find platinum. Add to this, many industrial products require platinum parts and people like platinum jewelry. Put these all together and you have a very rare precious metal that tends to hold its value quite well during times of economic challenges, high inflation periods, and crazy stock market gyrations.
With that said, platinum is not so rare that there is only a very small amount entering the market every year. Due to its rarity, there are lots of platinum miners out there. Their job is to get as much platinum out of the earth as possible. Even with all their efforts, however, the amount of platinum entering the market is not enough to meet the demand and drive the price down.
This is why it is a great idea to ride the rarity of platinum. Buying specially minted platinum proof coins that are never intended for circulation is a good move if you are going to ride the rarity of platinum. However, you have to time your purchases correctly.
If you are looking at platinum proof coins as a diversification move, you can buy them at any time. However, if you plan to invest in platinum proof coins to maximize potential huge moves and the price of physical platinum, you need to time your move correctly.
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Limited Edition Status Boosts Long Term Value
Since you are looking to precious metals and coins made up of precious metals, you probably already know that there is a huge collector's market for gold and silver coins.
As amazing as this market may be, you have not seen anything yet when it comes to precious metal coins. Take a look at the limited edition collector's value of platinum coins, it is amazing.
The thing that really separates this type of coin from gold and silver coins is the fact that it is made up of rarer metal. There are many other silver coins and gold coins that are worth more than platinum proof coins due to the special nature and rare circumstances of their creation.
Still, there is something to be said about platinum proof coin's ability to appreciate within the price. You have to remember that not only are you investing platinum coins made out of very rare components, you are also investing in proof coins.
Platinum proof coins are coins that have been stamped twice. This is why their appearance looks much better than typical metal coins. The lines are clearer, and images are much more vivid due to the high quality these coins possess. They attract more collector's attention and tend to go up in value.
However, you have to look in terms of long-term value. Do not expect that just because you bought platinum proof coins that the price of these coins will double overnight. It does not work that way. You are not dealing with stocks. You are dealing with platinum proof coins that have their own trajectory.
A lot of this trajectory is tied to the price of the underlying metal that is included in platinum proof coins. Another component, of course is that these are proof coins that they are collectors' items. Put these two together and you are positioning yourself in a good place.
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The great thing about precious metal coins are that worse comes to worst. The value of the metal component of these coins is easy to understand and easy to appreciate.
If you have platinum proof coins, you only need to look at the current price of platinum to know how much your coins would be worth in terms of base value. With that said, there is also a huge layer of collector value. Not only are platinum coins collectors' items, but platinum proof coins are rarer still.
The problem in terms of liquidity is that you have to be able to auction them off in collector's market fairly, quickly and transparently so that you can get a cash value for them. In certain situations, this may or may be quite difficult. This may or may not be difficult, it depends on a particular market.
It depends on the particular means you use to liquidate your stock of platinum proof coins. This is one key barrier to investing in platinum proof coins to diversify to precious metals. Diversifying your investment portfolio by investing in precious metals is always a good idea.
However, depending on the market situation, it may or may not be good to move into platinum proof coins or gold proof coins, or other types of proof coins. You have to look at how you plan to liquidate and how quickly that liquidation process would take.