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Brief rare Coin Overview
Investors own precious metals for their ability to fight
inflation, protect against currency devaluations, and their instant worldwide liquidity.
Investment quality gold and silver rare coins deliver these benefits AND three additional
advantages over gold and silver bullion. They offer a favorable supply and demand
dynamic, improved privacy, and freedom from potential confiscation…
Favorable Supply and Demand: Market values of rare coins are set by the daily interplay
of supply and demand. The supply of investment quality 70- to 220-year old gold and
silver coins is tiny and can NEVER be expanded. Demand, on the other hand, is
constantly growing – especially for high quality coins of proven rarity and desirability. This
favorable supply/demand situation frequently leads to superior long-term appreciation.
Improved Privacy: The government considers rare coins collectibles -- not investments.
Therefore (unlike for some bullion investments), numismatic investors are not required to
file any government reporting forms when buying or selling investment quality rare coins.
They provide an extra layer of privacy that is very attractive to many investors.
Confiscation Protection: In 1933, President Franklin D. Roosevelt confiscated the
American public’s gold bars and coins with Executive Order No. 6102. Only “collectors of
rare and unusual coins” were exempted. The exempted collectors benefited handsomely
when the government devalued the dollar by raising the price of gold by some 75% -- from
$20 an ounce to $35 an ounce. The President still has the emergency power to confiscate
gold bars and gold bullion coins today. But he cannot demand your rare and unusual gold
coins.
A Friendly Reminder
Coin Trader Inc. is not required to file any government forms when buying or
selling investment quality rare coins. However, we encourage you to report all
gains earned when you sell your rare coins – as you would with any successful
long-term investment.
What Are Investment Quality Coins?
Investment Quality Coins are the Blue Chips of the numismatic world. Without getting too
technical, they are coins that meet each of these ten elite criteria to be considered:
-- They are coins minted by the U. S. government prior to 1933.
-- They are minted of either gold or silver.
-- They have a long history of being desirable.
-- They have a favorable supply and demand imbalance.
-- They have a proven history of long-term appreciation.
-- They are in design series that is popular with collectors and investors.
-- They are among the top few percent of all surviving examples.
-- They have been certified by one of the leading independent grading services.
-- They are very actively traded, providing exceptional liquidity.
-- They have been carefully selected to assure their superior quality
As you can see, it takes a very special coin to qualify as Investment Quality. Still, there
are a fair number of coins that may appear to qualify for this elite description. Working with
Coin Trader, a recognized rare coin expert will help you build a portfolio designed for this
lofty category.
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The Superior Profit History of
Investment Quality Rare Coins
The depth, vitality, and long-term growth in values in the numismatic marketplace are well
known to experienced collectors, investors, and academic researchers. Consider the work
of Dr. Raymond Lombra, Dean of Economics at Penn State University. He conducted a
study entitled: ”Managing Portfolio Risk: An independent economic analysis of the
investment performance of rare U.S. coins in diversified portfolios for the period January
1979 to December 2003.”
Dr. Lombra, after his exhaustive research, concluded that adding rare coins to a portfolio:
1) added to its safety through diversification, 2) successfully fought the effects of inflation,
and 3) increased the portfolio’s appreciation.
That’s quite an endorsement of rare coin ownership from a member of academia! And it’s
not the only one…
The widespread expectations of market participants were also documented and reinforced
by Dr. Robert A. Brown, Ph.D., CFA in his study
Asset Class.” Dr. Brown reviewed the marketplace for rare coins and identified these realworld
examples to show the numismatic market’s growing depth, liquidity, and price
appreciation:
-- In February 1989, Wall Street’s Kidder Peabody (purchased ultimately by Paine
Webber) launched a $40 million rare coin investment fund, later increased to $110 million,
named the American Rare Coin Fund.
-- United Bank of Switzerland (UBS) maintains a separate and independent division, UBS
Gold & Numismatics, designed to provide an ultra high level of professional advice by
experienced experts in the field of numismatics to its international private client base.
-- In a July 2002 auction a 1933 $20 double-eagle gold piece sold for $7,590,020. In 1960,
this coin traded for $25,000. That’s a 14.6 percent annual rate of return over 42 years.
-- In an August 1999 auction, an 1804 proof silver dollar sold for $4,140,000. In 1960, this
coin traded for $30,000. That represents a 13.5 percent annual rate of return over 39
years.
-- In a 2004 auction, a 1913 Liberty nickel sold for $3 million. In 1960, this coin traded for
$50,000. That’s a 9.8 percent annual rate of return over 44 years.
-- Finally, in a May 1999 auction, a 1907 ultra high-relief $20 double-eagle gold piece sold
for $1,210,000. In 1960, this coin traded for $20,000. The owner enjoyed an 11.1 percent
annual rate of return over 39 years.
“Rare Coins: A Distinct and Attractive>
