Gold vs. Dollar Index 2001-2008

As investors' concerns about inflation become more acute, they increasingly turn to inflation hedges such as gold bullion. The above chart shows the dramatic relationship between the declining dollar and the price of gold.

However, some sophisticated investors realize that, historically, rare coins have been a much better hedge against inflation than gold bullion has been - twice as good, in fact.

Best One Year Return in Past 25 Years

• RARE COINS: 198.8%
• GOLD BULLION: 100.2%
• STOCKS: 31.1%

"The correlation of the return on coins with inflation over the last 29 years is well above that of other assets considered, and nearly two times that of gold; thus, the contention that gold is a better hedge against inflation than rare coins is not supported by the data."

From The Investment Performance of Rare U.S. Coins by Raymond E. Lombra, Ph.D., an independent study of the investment performance of rare U.S. coins for the period January 1979 through December 2007.
 

Mint State Rare Coin performance vs. price of gold
MS 63 and 64 Saint Gaudens are the rare coins that most often mimick the movements of gold bullion. When gold is trading up, Saints trade up, and vice versa. The one major difference is that when gold bullion begins moving up, Saints in 63 and 64 can trade at much higher multiples during the same time frame. Saints will track gold price movements, as evidenced by the chart above, but once gold starts a significant run, Saints can significantly outperform gold prices at the same time.

Wealth-building opportunity in an inflationary economy
The truth is, gold does more than protect your portfolio, it can fuel astounding gains. Is it too late for you to protect your portfolio from the ravages of inflation? Definitely not. Tangible assets, particularly rare coins, are proven to be not only the safest haven against the effects of an eroding dollar, but also an outstanding wealth-building opportunity in an inflationary economy.