Rare
Coins - 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 Rare
Coins, 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 Gold Coins).
In 1986, the new beginnings of an age old investment started
with the introduction of guaranteed 3rd party grading and authenticity
with PCGS (Professional Coin Grading Service)
on the west coast and then again in 1987 with the introduction
of NGC (Numismatic Guarantee Corporation)
on the east coast. These two independent entities almost single
handedly created that two way market and viability of Rare
Coins and Gold 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 Rare
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 Coins
and Gold 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 coins and gold coins market looks
good...perhaps better than ever.
This is part one of a brief
history of this opportunity in investing in
Rare Coins and Gold 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 Email:tompilitowski@yahoo.com
