Rare gold
coins have a big following. Some of the most astute and wealthy
investors fancy themselves as collectors of these gold footprints
of history. In the last couple years we in the business have seen
a 20.00 gold coin sell at auction in excess of 6 million dollars
and the demand for rarities have increased several fold just in
the past 24 months. So the big question, is it a good time to
buy comes to the forefront.
First a little background. Rare coins have been collected for
a variety of reasons since coins were first made. In this article
however, we will focus primarily on the "investment"
of gold coins and how they have turned more mainstream in recent
years and why we feel that the current market for them which is
quite strong is really only beginning.
For many years, dealers in coins have run the show. That is, it
was dealers who owned the majority of the inventory in the marketplace,
and also determined the condition, or grade of the coins they
were selling. The public, essentially had a lot going against
them, if they felt they could come out ahead in this game considering
those facts. And a lot of investors lost money, only to be lost
to the business forever, and never knew why. Reputable dealers
began to realize that this industry could very well implode because
of these tactics way back in the early 1980's and also realized
that the only way to increase the viability of rare gold and silver
coins as a true diversification was to make the market for these
coins, truly a two way market which meant, a guarantee of sorts,
not of the market itself, but at least of the condition so that
the customer could buy coins and think of what the actual buy-sell
spread was and what the actual market for these coins were in
conjunction with the timing of a purchase or sale. Typical investment
criteria without having to worry whether or not the condition
of the coins would be a factor (since condition is one variable
in what drives the actual value, and demand for a gold coin).
In 1986, the new beginnings of an age old investment started with
the introduction of guaranteed 3rd party grading and authenticity
with the Professional Coin Grading Service on the west coast and
then again in 1987 with the introduction of the Numismatic Guarantee
Corporation on the east coast. These two independent entities
almost single handedly created that two way market and viability
of rare gold and silver coins as an investment and viable alternative
to typical paper driven assets which the mainstream of course
considered "safe".
The coin market has gone thru some big changes since the "old
days" of pre 1987. One of the most noticed has been that
the investor as well as the collector, no longer has a concern
as to the basic value of a coin because of it's condition. There's
a set value. A sight-unseen market for these coins and unless
there's some wavering in the confidence in the investment itself
(as in the case with any other investment), the average investor
can now find price guides, charts, track movements and in general
make an investment in coins armed with easily accessible reports
and information so as to make an intelligent decision. And that
decision more often than not has been to buy a few for a rainy
day at the very least by larger percentages of people never seen
in this business before.
The market in the past couple of years as a partial result of
the prosperity of the past decade has seen thousands of new faces
buying coins and this has made a considerable impact on the "availability"
of better coins and in some cases, coins that were hard to find
before are nearly impossible to find now, and when uncovered,
have a waiting list of smart people ready to make a deal. This
has of course has also made an impact on the value of coins.
With the downturn in the US and World stock markets, investors
have searched high and low for viable alternatives to paper assets
and as most of us know, have taken advantage of the opportunities
in real estate these past few years. Again we see many people
starting to worry about a similar bubble to the stock market waiting
to pop in real estate and we are beginning to see even more aggressiveness
in terms of purchases in these rare gold and silver coins. This
is of course good news for those who are holding these coins or
thinking about buying some. As the client base continues to expand
and as alternatives to these seem to be far and few between, the
overall health of the rare gold and silver coin market looks good...perhaps
better than ever.
This is part one of a brief history of this opportunity in investing
in gold and silver coins and we will publish more as time ticks
on. For more information please contact us.
Cordially,
Thomas M. Pilitowski
U.S. Rare Coin Investments
P.O. Box 496607
Port Charlotte, Florida 33949
Tel: 941-629-4765
Toll Free: 1-800-624-1870
Website: www.usrarecoininvestments.com
