The Undisputed Facts
Historically, the business of buying and selling rare coins was highly dependent upon the subjective expertise of “experts”. The profitability of such an enterprise was dependent upon the investor’s grading and negotiating skills (or that of his advisors). Since 1986, however, sonically-sealed coins evaluated by independent grading services have engendered such confidence in the new method of grading and safeguarding rare coins that a sight-unseen market has emerged. “Bids” and “asks” are placed on coins which can be traded without the necessity of inspection.
Electronic rare coin trading networks now operate in the same fashion as NASDAQ and have a series of published bid and ask prices along with records of the last trades. Trades on these electronic networks are entered in the same manner as those on NASDAQ complete with confirmations by the trading exchange and are binding upon the parties. Coin investors can now track the value of their coins and access rare coin prices. Rare coin prices of so called 'generic' rare coins are also reported to major newspapers by the Associated Press and Bloomberg Financial Services.
Recommended Approach to Rare Coin Collecting
The U.S. Treasury Department’s 1954 Amendment to the Gold Regulations has been repealed and the proposed expansion of the definition of rare coins for purposes of confiscation has never been enacted into law. It is, then, apparent that an investor’s gold holdings should include “gold coins having a recognized special value to collectors of rare and unusual coins.” The investor’s best approach is to put together collections of rare coins. These collections are advantageous in a number of ways: (1) exemption from confiscation; (2) aesthetic enjoyment; and (3) significant investment return potential (well-designed sets of rare coins are in many instances more valuable than the sum of their parts).
New, Exciting Findings Regarding Rare Coin Collecting
Professor Raymond E. Lombra, the Professor of Economics at Penn State University who presented the 2002 analysis on rare coins for Congress’ Joint Committee on Taxation, recently completed a new evaluation of data on the performance of rare American coins over the past 25 years. The updated analysis (commissioned by Blanchard and Company) found that rare gold coin investments beat out all the other asset classes (stocks, treasuries, bullion, etc.). Professor Lombra’s results documented that rare gold coins are a very good long term investment, comparable to other financial assets such as stocks and bonds.
Prof. Lombra’s findings made some specific points that become important to those considering rare gold coins as an investment vehicle.
(1) Over a 25 year period, high-end rare gold coins are the place to be. Quality is what counts most as rarity breeds success in the rare coin market. It was found that high-end rare gold coins outperformed stocks and outpaced everything else over the 25 year period.
(2) Over the best 3 year period, Prof. Lombra found high-end rare U.S. coins far and away the best investment, outperforming all the other asset classes.
(3) The best 1 year period showed phenomenal results for rare coins. No other asset class even approached such results.
Ideal Timing for Rare Coin Investments
We are all aware of the economic situation today - the weakening dollar, widening deficits, growing trading gaps, lackluster forecasts for equities, and the tenuous real estate bubble. Inflation continues to be looming just as global conflict and political upheaval extend here at home as well as over the horizon. All of these factors appear to be fueling some very dynamic times for today’s bull market in gold and rarities. It is very likely that there are years of growth to come within these markets.
In these times, it becomes prudent to develop an investment plan that is based upon solid information such as that of Professor Lombra’s data and his very clear findings presented to the American public before congress. These findings are independently confirmed by other research firms with the same results.
Historically, high-end rare coins are the best place to safeguard your dollars in times such as these. Proof Gold, Early Gold, Early Silver, Branch Mint Gold, High Relief's, and World-Class Rarities have done quite well. This looks to be the appropriate strategy for today. Now more than ever, creditable independent research, confirms and strongly recommends the history that rare, high-end U.S. coins, provide the balanced risk and solid growth to support a healthy financial legacy.
Today, make it part of yours.