Competing among the best athletes in the world, winning a gold medal is the highest possible accolade. Since it is gold, and gold has considerable financial value, the question is, could Games medals work as an investment vehicle? How is their value determined and what is the surest way to such an investment?
The intangible side of the medal is what creates the value of the medal
Although they are called gold medals, they are actually made of silver and coated with a thin layer of gold. Considering only the physical part of the medal, the net value of the gold medals awarded at the Paris Olympics is just over 860 euros. This is almost twice as much as a silver medal, as the value of gold has seen a significant increase recently. The bronze medal, due to its simple composition, is worth just under 4 euros.
What sets this year's medals apart from previous ones is that each has a small piece of the original Eiffel Tower. The pride of all France was not broken or destroyed by anyone - simply, during the long history, more than one renovation was carried out, and all the old details were preserved. Here is the iron obtained from them and found its place in the medals of the Olympic Games. It is likely to add value as well.
"A gold medal, works of art, exceptional wines are just a few examples of collectibles that have enormous potential to increase in value over time. If you look at the secondary market for similar assets, you can quickly see this - similar coins with different dates of manufacture can differ significantly in price. And in the case of a gold medal, let's add the fact that such property is extremely rarely sold and when presented becomes inseparable from the athlete and the historical context", says Eglė Džiugytė, Head of the Financial Markets Department of Šiauliai bankas.
Although the medal is not mine, I want it
It is probably unusual to think that any athlete would want to part with the assessment of his sporting achievements. However, there is more than one case in history when an athlete did exactly that. The reasons for this decision were different: some did it to pay for their own or others' medical expenses, while others wanted to donate that money to a higher purpose. There is usually no shortage of buyers for such rare property.
Just over a million euros - this is currently the highest amount for which a gold medal has been sold. He belonged JAV for track and field legend Jesse Owens, who participated in the 1936 Berlin Olympics. Of course, the date adds extra value here, but the gold medal won by Ukrainian boxing legend Wladimir Klitschko in 1996 cost almost as much. The final value of gold medals does not depend only on age, other emotional and intangible criteria also have a great influence.
“Measuring the value of a gold medal can be compared to a start. We probably all know at least a few examples of how companies that have almost no physical assets are valued at millions and even billions of euros. If we had two such similar companies and compared them only in terms of physical assets, we would probably not see any stark differences. However, each would have a completely different story about the future they see and how each will contribute to it. This is where the emotional, intangible aspects that distinguish one brand from another begin. Of course, there are specialists who assess how much a specific medal can cost, but at the end of the day it is a matter of agreement between the parties - how much the owner wants to sell for and how much the buyer wants to buy for," E. Džiugytė observes.
Up to the medal with investment
Although at first glance it may appear that individuals buy gold medals to admire at home, usually such transactions are made for future profit. For many, this is the same investment as buying fund units or cryptocurrencies. Of course, such an investment has a lot of additional risk, but in case of success, it can accumulate considerable wealth for the owner.
"Perhaps the most glaring obstacle to engaging in this investment practice is the sheer amount of money it takes to buy that medal in the first place." No one will give a loan, and it will be difficult for anyone to sell. Therefore, saving up for your first gold medal investment will require either considerable luck or strong financial discipline and patience. It is not for nothing that gold medals belong to the group of extremely expensive possessions, which only a few can acquire. But, as they say, nothing forbids you to dream and pursue it", smiles E. Džiugytė.
According to the head of the Financial Markets Department of Šiaulių bankas, if you have such dreams, you should look into investing - this can help you achieve your goals faster. US businessman Ron Burkle, who paid one million euros for the gold of the 1936 Berlin Olympics, was 60 years old on the day of the purchase. If you still have 30 years left before this centenary, only a monthly investment of 450 euros separates you from reaching a million euros. If you use compound interest and the annual return is 10%, at the age of 60 you can spend your accumulated wealth on buying the gold medal of the athlete you support, as long as he agrees to sell it and it costs the same million euros.
