A Beautiful Investment That Could Make You a Lot of Money

 

“Early morning hath gold in its mouth.” Benjamin Franklin

Minted from 1907 until 1933, the Saint-Gaudens Double Eagle is widely considered the most beautiful coin of all times. In fact, the coins are so beautiful that some people think they’re worth buying just as works of art. I myself own a couple — purchased several years ago — and I dearly love just looking at them.

But there are other, maybe better, reasons to include them in your wealth-building plan. Consider this:

A Double Eagle contains nearly an ounce of gold. That means their “meltdown” price today is roughly $360 — the current value of an ounce of gold. Of course, coin enthusiasts will always pay more than meltdown value for Saint-Gaudens $20 gold pieces — but right now, they are selling for the smallest premium over the price of gold in their recorded history. In other words, at today’s “discounted” price, you could own a piece of history — a real gold coin with intrinsic value — at what could be viewed as a bargain. That makes your downside risk negligible — Steve thinks no more than 20% — while your upside potential is 100% or more.

Why is that? Well, the answer can be found in the Federal Reserve’s stated desire to fight deflation by printing as much money as needed to keep prices from falling. In this scenario, paper dollars lose value — and that means the per-ounce price of gold will rise. In fact, that’s already happening. In just the last two years, the price of gold has gone from about $260 per ounce to $360 per ounce.

Steve Sjuggerud believes that this trend is likely to continue. And that means gold investments could be an excellent place for you to profit over the next few years.

What kind of profits are we talking about? Well, in the gold-coin bull market of 1976-1980, gold coins rose an amazing 1,195%! That means an investment of just $10,000 would have risen to $129,500 in about 48 months. In the 1987-1989 bull market, coin prices rose by 665%.

According to Steve and other conservative advisers, investors should keep a maximum of 4% of their total portfolio in gold coins. And Saint-Gaudens $20 Double Eagles not only are selling at bargain prices, they are also favorites with both collectors and those who buy just for the value of the gold. . Saint-Gaudens coins from the 1920s that are graded MS-63 are currently selling for around $450 each. That’s only about a 25% premium to the current price of gold. If, as Steve expects, demand for these coins rises, both the gold price and the premium price could increase, easily pushing the total value of these coins up to $600 … or much more.

Another Saint-Gaudens to consider is the MS-65, currently selling for about $850. These coins — slightly rarer than the MS-63s — sold for almost $4,000 in 1989, at the height of the gold-coin bull market. In Steve’s opinion, they are an even better deal than the MS-63s — and a better deal than they’ve been at any time since the coin market’s bottom two years ago.

Steve’s recommendation, then, is to buy two MS-63 Saint-Gaudens coins (at around $450 each) and one MS-65 Saint-Gaudens (at around $850) — for an investment of about $1,800. Buy as many as you’d like in that ratio, up to a maximum of 4% of your total investment portfolio.

“This way,” Steve says, “we have the exposure to the MS-63s on the low end, to benefit from a rise in the price of gold with little downside risk. On the high end, the MS-65s are volatile — but when the action heats up, I expect that’s where the new entrants will go. If you’re just going to start with one, start with the MS-63.”

You could buy these coins through a local dealer or even try your luck online. Alternatively, you could contact Paul Montgomery, a coin-dealer friend of Steve’s who offers coins for sale at fair prices. For more information, contact Paul by e-mail at PaulM@BowersandMerena.com. (Include your phone number and address.)

(Ed. Note: Dr. Steve Sjuggerud is the editor of the True Wealth investment-advisory service and of “Investment U.” )