Gold may not be your first investment choice, but older generations put a lot of faith in the metal. Some inherited gold themselves from a generation that had seen the world come about as close to collapse as it ever has in living memory; others have seen periods of super-high inflation eat away their savings and wanted an asset that would protect their legacy. Still more have seen enough stock market cycles to know that leaving all of your savings on the market can be a risky move.
Receiving a gold inheritance can leave you scratching your head about what to do. Should you hold onto inherited gold coins or should you sell them and do something else with the proceeds? Whether or not you should keep a gold inheritance in the form of gold coins or gold bars really depends on your situation and the context of the market.
When should you consider selling gold coins?
There are a few compelling reasons you should sell gold coins when you inherit them, both personal and related to broader economic trends.
1) You Have No Other Savings – A diversified portfolio is a healthier way to save for your retirement. Gold is not a productive asset, meaning it does not provide interest, rent, or dividends. It is primarily a hedge against fiat currency, and a great way to keep a relatively liquid asset that won’t losing purchasing power to inflation.
2) Stock Markets Are Growing – Healthy stock markets tend to mean stagnant gold prices. Long-term, stock markets tend to outperform gold, though gold thrives during stock market crashes.
3) You Have Debt – Paying down debt is a better option than keeping a non-interest producing asset. In fact, the only reason you should invest when you have debt is that you can earn more than your interest payments.
Inheriting a significant sum of gold also comes with its own costs. You will have to invest in a form of security and even have it insured so that it’s not lost due to theft or a fire. You may also consider placing it at the bank or in gold storage with a gold company. You can click here to find out more about storing gold coins and gold bars.
When should you keep gold?
1) You Already Have Retirement Savings – If you have already been saving, investing in equities, and preparing for your retirement, you may want to keep gold for the next economic downturn. It may not have been your first choice for an investment, but if it’s fallen into your lap, gold provides some insurance against market downturns that you can turn to your advantage.
2) Stock Markets Are Volatile – Stock market volatility should be avoided if you’re putting more money away for your retirement. No one can guarantee gold prices, but if historical patterns hold, gold will be worth more than cash.
The primary value of bullion gold coins lies in their gold content, but if you’ve inherited very old gold coins, they may have numismatic (collectible) value as well. Look them up online or take them to a gold shop or coin shop for an appraisal.
Whether or not you should keep a gold inheritance all depends on your personal finances as well as the timing.