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<p>[QUOTE=&quot;Rono, post: 257864, member: 6492&quot;]<b>stock markets and coins</b></p><p><br /></p><p>Howdy good people,</p><p>&nbsp;</p><p>Great thread.</p><p>&nbsp;</p><p>It&#039;s pretty convoluted people.&nbsp; Right now both the stock market and coin market have been doing well.&nbsp; That does not, however, mean that they have a long running positive correlation.&nbsp; There are many, many factors that impact each - sometimes positive and sometimes negative.</p><p>&nbsp;</p><p>Coins have done very well even when stocks haven&#039;t.&nbsp; When things melted down in 2000, coins (and real estate) became an alternative to stocks as people had cash and they didn&#039;t want stocks.&nbsp; </p><p>&nbsp;</p><p>When the market is doing well, folks feel wealthier and have a tendency to spend more and coins can do well.</p><p>&nbsp;</p><p>When the market is roaring as in the late 90&#039;s dot.com bull, coins didn&#039;t do well as the stock market hysteria attracted the extra cash.</p><p>&nbsp;</p><p>Right now the whole stinking planet is awash in excess liquidity as the central banks continue to print money 24/7/365.&nbsp; This means there&#039;s plenty of cash to go around for - stocks, coins, widgits, whatever.&nbsp; It also means that there is extra cash chasing scarce resources which results in higher prices - stocks and coins and widgits.</p><p>&nbsp;</p><p>I just finished reading &#039;the investor&#039;s guide to US coins&#039; by Berman and DiGenova.&nbsp; Great book, but the authors REALLY beat this subject to death.&nbsp; However, their point is that rare coins (not your penny collection) are the perfect counterpoint to all other investment options (stocks, bonds, real estate) for both good times and bad times.&nbsp; Indeed, the long term chart looks like a set of stairs climbing upward to the right, rather than a syne curve (up and down).&nbsp; It goes up, pauses, goes up, pauses, goes up, pauses, etc.</p><p>&nbsp;</p><p>And this sort of reasoning is similar to what I read recently by the Old Baron Rothschild - that your wealth should be 1/3 securities, 1/3 real estate, and 1/3 rare art.&nbsp; Well, I don&#039;t know anything about rare art, but a little about coins, so . . . .&nbsp; </p><p>&nbsp;</p><p>The whole idea is that even if a particular asset class is higher risk by itself, combining various asset classes into your portfolio actually reduces the overall risk coefficient of the total package.&nbsp; And this has been proven in recent years by numerous folks with some receiving Nobels.</p><p>&nbsp;</p><p>Anyway, I digress and pardon the drift.</p><p>&nbsp;</p><p>peace,</p><p>&nbsp;</p><p>rono[/QUOTE]</p><p><br /></p>

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