Diversification is a strategy that was designed to manage overall risk. This makes you less dependent on a SINGLE asset class for overall performance. This strategy helps increase the value of your assets over longer periods of time and is the key to any successful portfolio. Having all your money in one area makes you solely dependent on that single asset's performance to achieve your financial goals.
Assets are divided into "classes." Each class will have its advantages and disadvantages, but when you take assets from different classes and blend them together, the advantages of each outweigh the disadvantages.
Two assets that respond in the same way to economic changes are said to be "correlated." Two assets that respond differently to economic changes are said to be "non-correlated." Spreading your assets over non-correlated classes is the key to increasing performance and lowering risk!
Gold bullion is an asset class largely non-correlated from traditional investments. During the 2008-2009 housing crash, those people that had assets in the stock market suffered large losses, but those people with assets in gold saw gains.
However, while gold bullion can be beneficial for short-term goals, the largest gold owners in the world can have a major effect on your gold's value. These owners include governments and central banks around the world. Gold can be used to manipulate the value of world currencies and, therefore, can be used for political purposes. Because of this, the value of bullion gold can rise and fall overnight leaving you holding the bag.
Investment-grade rare coins are non-correlated from traditional investments but are also non-correlated from gold bullion. If you want to protect your portfolio from a falling dollar and an uncertain market but are concerned about the ups and downs of gold, investmen-grade rare coins provide the solution. It is vitally important to have both forms of gold: bullion and rare coins. By blending these two assets together you protect yourself from the downside risk of bullion and give yourself the long-term growth that rare coins can provide.