Numismedia Market
Report: Pop Reports Crucial for Investors by Numismedia | October
12, 2013 - Posted on 4/16/2013
Predicting the near- or
long-term direction of other investment markets can be a
huge risk in this economy, to say the least. However, the
rare coin market has achieved such respect as of late that
many financial analysts consider it to be one of today's
most — if not the most — secure areas to invest
disposable income.
Of course, you still have to know and understand
the coin market in order to maximize your profits.
For the last three decades dealers and collectors
have spent countless hours analyzing the rare coin market
searching for rarities destined to increase in value. Certainly,
supply and demand is always the main factor in selecting
the right coins for future profits. But advanced numismatists
will also look for potential acquisitions that have other
factors that make the investment less risky: coins that
have a history, low populations, eye appeal, and high demand
in respect to its price history in all grades and similar
coins.
The 1808 $2 ½ Capped Bust Gold has
an original mintage of just 2,710 coins. The total population
of certified coins is 70 in the circulated grades and only
27 Mint State coins by NGC and PCGS. This leaves a very
small pool of available coins in the market. This has traditionally
been a very popular coin to collect and, even in F 12 condition
(only 2 certified), the FMV is a robust $29,310. The grade
with the most coins certified is the AU 58 with 27 coins
by both services. The FMV for the AU58 is currently $125,000.
As with all certified coins there is a strong possibility
that the totals may be skewed due to resubmissions. The
following graph shows the path of the 1808 $2 ½ Gold
in MS 61 from July 2005 when the FMV was $81,250 through
today with the FMV at $159,380.
There are eleven certified 1808 $2 ½
Capped Bust Gold coins in MS61 with another eleven grading
higher. MS 65 is the highest grade and we have no record
of a trade at that level. In MS 64 the FMV is $520,000 and
there is only one coin certified by NGC. As you can imagine
this is a very difficult coin to acquire with such low availability
and high value. But every advanced collector is cognizant
of this coin and if any come available, they are ready and
willing to jump at the opportunity, as long as they can
afford it. This is an extreme example of what many collectors
look for in pursuing rare coins with potential for higher
profits. There are hundreds of other coins that have the
potential to increase over the next couple of decades. Low
populations that remain unchanged for many years can be
an indicator for price stability, increasing confidence
and demand, and possibly leading to higher prices.
Another factor to consider when searching
out potential rarities for future profits is the value on
the low end of the grading scale and how it compares as
the grades increase. Coins that have a high value in low
grades will have a good chance of maintaining their price
structure through all grades. For example, the 1870 CC $10
Gold has steadily increased in value in all grades over
the last ten years. This coin has an original mintage of
5,908 and there are only 79 coins certified by NGC and PCGS
combined. Further, the highest grade known to this point
is AU 55. In F 12 the FMV is $17,810 and it jumps to $70,850
in AU 50. There are a total of 20 coins in all the AU grades
so the number of coins available to appear on the market
is minuscule. In the last ten years Heritage Galleries has
only auctioned 14 of these coins and some of those are repeat
sales. The lowest grade auctioned was a VG 10 and the highest
was AU 50. The current FMV for the highest grade available
is $122,850 in AU 55. The following graph traces the AU
50 FMV from July 2005 to today at $70,850.