Smart money investors see the long-term glitter of Krugerrands

Can coins be considered a respectable asset class? The proof of the pudding is reflected in the dramatic long-term advances of the Krugerrand.

If Krugerrands, along with old coins enjoying a measure of rarity value, can validly be looked upon as an important asset class, investors should take them seriously and make it their business to explore all the relevant market nuances.

Perhaps the most glaring nuance is the scepticism with which so many South Africans view the coin market. It’s a scepticism rendered all the more remarkable on account of:

 South Africa still being the world’s largest gold producer;

 the Krugerrand being the world’s most successful gold coin;

 gold being the world’s most liquid market;

 the coin market worldwide being worth $30 billion (R207 billion); and

 Americans of all ages investing in coins versus those principally between the 40 and 60 years old in South Africa.

Tens of thousands of local investors are allowing this opportunity to pass them by, perhaps because they are unaware of the attractive factors. But few could be unaware of the headlong gains accruing to owners of Krugerrands in the past couple of years.

Possibly the most resounding endorsement I can offer for this investment class is that it is populated almost exclusively by successful self-employed individuals.

I call these people the millionaires next door. People who deliberately avoid extravagance, yet have access to sufficient disposable income to count coins among their investment portfolios.

This is where the smart money vests – money that goes about preserving and growing its capital systematically and professionally.

Right now, the smart money investors are constructing their portfolios so that the coin asset class comprises 10 percent to 20 percent of the total by value.