Rare Coins

     Just as is the case with other investments, the value of every rare coin is determined in an active two-way market of buyers and sellers. The magnitude of the activity associated with a particular coin is impacted by three factors: (1) The coin’s rarity; (2) The demand for the coin in the marketplace; and (3) The coin’s level of preservation and eye appeal.

     Rarity, Demand and Condition

     The rarity of a coin obviously plays a key role in establishing its value. Both collectors and investors are especially attracted to the scarcer coins, meaning that rarity creates a demand all its own.

Demand for rare U.S. coins comes from both collectors and investors. Collectors assemble collections throughout their lives without any intention of making a profit, or even selling their coins at some point. Investors acquire coins strictly to earn a return on their investment. Some of the factors that can result in strong demand for a rare coin are scarcity, condition, historic importance, aesthetic appeal and a profitable investment history,

    The condition of a coin has a profound impact on its value. Most of the coins minted throughout history were used in commerce and huge numbers of coins were forever lost during that process over the last 27 centuries to date. Others were worn in the circulation process, often rendering them unsuitable for investment.

     A small number of coins never did circulate and survive in a much higher, uncirculated state of preservation.

Investment grade coins customarily are those that are graded in one of the uncirculated grades between 60 and 70 on the American Numismatic Association’s numerical grading scale.

Uncirculated coins are classified into two groups: Mint State and Proof.

 

    Proof coins were never meant for circulation but were minted in very small numbers using a very meticulous, special process. Mint State coins were originally intended to circulate but never did and thus remain today in the same condition that they were in when they came off the coin press hundreds of years ago.

     The level of preservation of a coin often determines its attractiveness and the more attractive a coin, generally the greater demand from investors and especially collectors. Higher demand often means higher values.

Rare Coin Third Party Grading

     To protect our clients, Strategic Management sells rare U.S. coins graded and certified by one of the major independent grading services, Numismatic Guaranty Corporation (NGC), Professional Coin Grading Service (PCGS) and Certified Acceptance Corp Grading (CACG). These firms provide dependable protection for rare coin buyers and safeguard the integrity of the rare coin market. 

   NGC, PCGS and CACG make rare coins safer and more liquid because they guarantee the grade and authenticity of the coins they examine. The trust in CACG, NGC and PCGS is demonstrated by sight-unseen trading of their coins on an electronic numismatic exchange.

     These firms also publish population/census reports that serve as guides to the relative rarity of all the coins that they have graded, giving dealers, investors and collectors real-world data on the number of rare coins that survive in various grades for each issue and date.

     Why Invest and Collect Rare Coins?

     Rare coins should play a key role in your long-term financial plan because they have historically produced excellent investment performance and because they provide a unique measure of security for your hard-earned wealth. In fact, carefully selected collections of rare U.S. coins have provided exceptional returns for their owners—even though those collectors did not have profit as their original objective.

     While coin collecting is widely regarded as a hobby, history has shown that carefully selected collections of rare U.S. coins have often outpaced other investment categories, such as stocks, bonds, real estate and gold bullion.

     You should put the power of rare coins to work as part of a properly diversified portfolio. Tangible assets, such as rare coins, are useful for achieving proper diversification because they provide investors with profit potential at the same time that they decrease overall volatility, since they tend to move independently of paper assets.

     Rare coins are a classic appreciating asset with a history of long-term price increases, but they also offer investors a variety of vital unmatched benefits that help investors enhance the safety of their collections and the security of their wealth:

•      Privacy: Because rare coins can legally be accumulated privately, they are one of the few remaining investments suited to those who do not care to have the rest of the world know what they own. In today’s environment of frivolous law suits and instant availability of personal information over the internet, rare coins can be a great benefit as a truly private investment. And because no personal identifying information is required for rare coin transactions, when the time comes to liquidate, you can sell your coins in complete privacy. Moreover, unlike gold bullion, which can still be confiscated under federal law, rare gold coins are specifically exempted from confiscation provisions.

•      Liquidity: Independent grading by companies like Professional Coin Grading Service (PCGS), Numismatic Guaranty Corporation (NGC) ,Certified Acceptance Corp Grading) CACG and electronic exchanges have made rare coins the most liquid collectibles in the investment world. Thousands of coins trade each day, often sight unseen, from dealer to dealer and from person to person on these modern exchanges.

•      Portability: Rare coins can contain a very high unit value in a physically small package. As such a concentrated form of wealth, rare coins are easy to store and transport. Coin owners can easily place thousands—even millions—of dollars of wealth in their pocket for easy, concealed transport from financial center to financial center, or for any reason. Admiration and enjoyment of superb and valuable objects and works of art has long been one of man’s great qualities. This kind of passion is what motivates collectors and investors to bid millions of dollars on a Picasso. But you would never be able to discretely and securely walk the city streets of America carrying a Picasso. Rare coins, on the other hand, are perfectly suited for discrete transport.

•      Intrinsic value: Unlike paper investments, rare coins have real, tangible value you can feel when you hold them in your hand. Obviously, stocks and bonds cannot offer this advantage, but neither can most other collectible investments, such as art, stamps, rare documents or currency. Gold and silver rare coins thus contain the intrinsic security of precious metals, plus profit potential no matter what precious metals prices do.

•      Aesthetic appeal and historical significance: In addition to the “crass profit motive,” rare coins are characterized by a different, ethereal value. This value should not be taken lightly because it forms the basis of coins’ appeal to collectors, who are the foundation of the entire numismatic market. Once a collector acquires a coin, he or she often finds it difficult to part with it. Once they hold the coin in their hands, it becomes very hard to decide to sell it. This phenomenon is significant for the investor because it means that many collectors will retain their collections almost indefinitely. This contributes to rare coins’ merit as investments by further limiting the available supply on the market. Even among investors, there is a certain pride of ownership associated with rare coins—a pride that could never exist with stocks, bonds, mutual funds, or cash. Rare coins connect us to America’s history in a way that no other investment ever could. At the same time, they are also genuine works of art, designed and crafted by talented artisans decades and centuries ago.

     SMGMT will work just as hard on your behalf whether you are looking for a common date coin or an esoteric one-of-a-kind museum quality treasure for your collection. We service want lists and make a two-way market in certified NGC/ PCGS and CACG approved rarities for the discriminating collector or investor. In addition, SMGMT also offers a unique Worldwide Insured Storage Program for its clients. We look forward to being of service and listening to exactly what your investing and collecting criteria is. To Place an Order or to request information about our Worldwide Insured Storage Program please call or text our trading desk at 504.356.9880

or email eje@strategicmanagementllc.net

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