Reaching New Heights

reaching_new_heights

The coin market continues its blistering pace as fresh investment money seems to be flooding into all areas of the collectables market. Recent mergers within the industry have resulted in the formation of several new hedge fund type vehicles which will presumably acquire market positions and take on the role of specialist. More power to them. This market could use some more structure. The collector has had a tough time finding a source for all of his needs within a particular series. More market specialists will provide him with more one-stop shopping options. Television sales have also provided the busy collector with single source fulfillment. It has also introduced millions of new collectors to the coin market. This has the effect of increasing the core base of numismatic holdings. In fact the current crop of new investors represents the widest base we have ever seen. Not since the hey-day of the 1950’s has the coin market enjoyed this kind of growing widespread support. These collectors are seeking the most desirable of the coins struck at the various mints. U.S. gold coins continue to dominate this trend, with scarce date and mint-marked examples of coins a very close runner-up. Silver coins from the Standing Liberty series, as well as early Silver Dollars lead the way in the non-gold coins. As this goes to press, Gold bullion is hovering around the $500 mark, and silver is around $8. The metals group has a lot of resilience in this range, and confidence is building in this item’s ability to hold these higher levels and in fact push upwards to $600 or more in 2006. This recent movement in the strategic metals has only acted to expand an already vigorous market. In previous inflation cycles, Rare Coins are often the first to exhibit the effects of an expanding market. We are encouraged to report that this cycle is no exception. Whether we examine auction prices or look at any of the popular pricing guides, the purely financial scope of this market is, quite frankly, only in its infancy. The frequent mention of rare coins on financial programs and in the popular press serves to enhance the image of numismatics as a core element of a prudent financial plan. Many financial planners are recommending coins to their clients as a hedge against inflation. A few veteran collectors have reported selling their collections and reaping large profits, only to come right back into the market, collecting a more elusive element that perhaps could not be afforded under previous circumstances. These are the collectors that are providing new signs of expansion in the high end of this market. Coins offer so many interesting avenues to explore that anyone who really “catches the bug” can never resist or completely walk away. For the pure collector, competition has intensified beyond anything they could imagine. Plus, the price of choice coins has proven what we've thought for years; that major value usually results from quality. I recommend coins that are in the top 5% of surviving specimens with exceptional eye appeal. These often represent the best value and will likely offer a better return over the years. The toughest part of all of this is patience. Although the prospects are good, nothing comes overnight. A slow steady growth however can provide the rewards that legends are made of.

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