Coin dealers see many Hoosiers investing in gold and silver
Arizona Coin Collector
http://www.indystar.com/article/20090112/LOCAL/901120351
Coin dealers see many Hoosiers investing in gold and silver
Recession prompts many to turn to gold and
silver, according to coin dealers
By Robert Annis
Posted: January 12, 2009
Frightened by the financial market roller coaster, many
Hoosiers are ditching their stocks and bonds and
putting nearly all their nest eggs in precious-metal
baskets.
David Bernhardt of Engle's Coin Shop on Indianapolis'
Northwestside said he has seen a significant increase
in the number of people buying $950 U.S. mint gold
bullion coins to diversify their portfolios.
"People are getting scared," Bernhardt said. "They're
taking money out of other accounts and putting it into
gold. They see it as an insurance policy, but one they
don't necessarily want to cash in. If gold rises
(a lot), it means everything else has tanked."
The U.S. Mint reported nearly 1.2 million gold coins
were sold in 2008, almost triple the number of the year
before, and more than 36,500 sold during the first
week of 2009.
Gold closed Friday at $854.60 an ounce, while silver
stood at $11.32 an ounce. Over the past year, silver
dropped nearly $4 an ounce, but the price of gold
fluctuated from $700 per ounce to $1,009 per ounce,
increasing just 5 percent.
With the Dow Jones Industrial Average hovering in the
mid-8,000s and unemployment reaching a 16-year high
last week, many investors say they would happily take
such a modest return but expect the price of gold to
rise even higher.
National experts continue to debate the value of gold.
Rick Aristotle Munarriz of investing Web site The
Motley Fool suggested gold could be outperformed by
Google stock this year, while the Fool's Christopher
Barker endorsed a Citibank report predicting gold
could reach $2,000 an ounce this year.
According to John Smith of Smith's Coins in Lafayette,
co-sponsor of a coin show Sunday on Indianapolis'
Northeastside, the number of investors has increased,
but overall attendance at the show has dropped, as
many hobbyists no longer can afford the pastime.
Sales of rare coins might be down, but one vendor at
Sunday's show said he had sold the bulk of his silver
U.S. Mint coins less than two hours after opening.
Bernhardt said most of his customers are putting 5
percent to 10 percent of their investment funds into
gold, "just in case," but Indianapolis resident Dan
Ashman estimated 75 percent of his investments are
tied up in gold and silver coins.
"I've put more money into coins than I have my
401(k)," he said. "In the end, I think I'll get a
better return on my investment."
Fred Warsco, Indianapolis, feels so confident about
precious metals that he completely divested stocks
and bonds from his portfolio several years ago.
"It's working out great," he said. "I've had almost
no losses. People started calling me, asking for
advice after they lost 40 percent of their investment
in the (stock) market last year."
Although many analysts expect stocks to remain
volatile over the next few years, Bernhardt
advised caution.
"There are so many people, particularly on the
Internet, saying conflicting things," Bernhardt said.
"There's a lot of bad advice and information out
there. You've got to be careful."
The high price of gold, combined with the desperate
economy, apparently has led many Hoosiers to cash in
their gold valuables to use the money for expenses.
Bernhardt said most visitors to his coin shop lately
were looking to sell coins, not buy them.
Call Star reporter Robert Annis
at (317) 444-5572.
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