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US Rare Coins: Is it time to buy?
May 25, 2003
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
Toll Free: 1-800-624-1870
Email: tompilitowski@yahoo.com

Rare Coins - Gold Coins - Rare Coin Investments

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