Why you need to buy and sell gold coins (Part 4)

Maximum return on investment

Throughout history, many coin collections have produced substantial long-term profits for their owners. This is particularly true for coin collectors of this century. In fact, Harold Bareford reportedly bought a collection of American gold coins for $13,832 in the early 1950s, which was resold at auction in 1978 for $1.2 million. A larger collector, Louis Eliasberg, amassed a collection that cost about $300,000. In 1982, he fetched $12.4 million at auction.

The return on this investment has been well documented by sources as diverse as The Wall Street Journal, Consumer Reports, and a host of industry periodicals and guides. What these reports have shown is that carefully selected portfolios of rare coins have had a high rate of appreciation over the long term.

Of course, past performance is no guarantee of future results, and investing in rare coins involves risk. While the market performance of different currencies varies substantially and there can be no assurance that an individual investor’s portfolio will enjoy results similar to those documented in various independent reports and surveys, those reports and surveys illustrate the impressive returns that can be achieved. carefully selected. US coins can produce.

Fiscal benefits

Capital gains in coins can only be taxed on liquidation, when the gains are actually realized. There are no taxes on ghost or undistributed earnings as there are with some investments. And, unlike most other investments, there is no federal income tax liability on so-called “wash sales” or similar exchanges that allow investors to exchange their rare coins for other rare coins of equal or greater value.

Intrinsic value

Unlike paper investments, rare US coins have real tangible value that you can feel every time you hold one in your hand. Therefore, they offer two ways to build wealth. Carefully selected coins truly offer the best of bullion and numismatics in one investment. They contain the intrinsic security of bullion and can also offer extraordinary profit potential, regardless of what spot prices for precious metals do. Still, precious metal content is only a relatively small factor in determining the value of many rare US coins whose value is based almost entirely on condition, demand, and rarity.

Historically Significant Beauty

America’s rare coins are part of our history, direct ties to America’s rich heritage, as timeless and valuable as history itself. For two centuries, US coins have been symbols of American stability as well as reflections of national pride. Throughout our nation’s history, coins have highlighted our national heroes, honored our great achievements, and commemorated significant events. These truly historic works of art commemorate past sacrifices made in the name of freedom.

Rare US coins familiarize investors with historical figures and events, no matter how far back in time. The satisfaction of actually owning a piece of history from a bygone era makes investing in rare US coins truly unique. Each coin has traveled a different path through history. As a result, each one is a unique embodiment of the hopes and dreams of our founding fathers.

Condition

The vast majority of American coins ever minted were distributed. Many coins were lost through wear and tear and others were damaged through use, thus eliminating any potential numismatic value. The few surviving uncirculated coins are in much more pristine condition.

Investment-grade coins are primarily those coins graded in the uncirculated 11 grades, 60 and above, on the American Numismatic Association’s 70-point grading scale. The grade of a coin is a measure of its condition or state of preservation. The higher the grade, the better the condition.

Uncirculated coins fall into two broad categories: Proof (PF or PR) and Mint State (MS). Mint State coins were originally intended for circulation, but never circulated, so they remain in the same condition today as when they were minted. Proof coins were never intended for circulation, so they received very careful handling and were specially minted at least twice on highly polished planks.

The beauty of a coin can attract both collectors and investors and thus increase the demand for a particular coin or game. This increased demand may result in increased values. Visual appeal is affected by several factors, including the beauty of a coin’s design, the minting process used, the fullness and sharpness of its strike, the tone, the brightness of its gloss, and the amount of wear and amount of wear. imperfections on the surface of the coin.

Portfolios or collections?

The old description of coin collecting as the “hobby of kings” is both accurate and misleading…accurate in conveying the outdated perception that coin collecting is restricted to only the very wealthy, misleading because the number of collectors has increased steadily. and the American Numismatic Association has estimated that it includes between 7 and 10 million coin buyers in the United States alone. Typically, the coin collector collects coins for their rarity and historical value. Collectors view their coins as rare art and as tangible remnants of the cultural and economic forces that created them.

The investor starts from a different starting point: the fact that coins of proven rarity have shown remarkably high rates of appreciation. He sees the financial results of the pleasures of collecting and makes his original purchases with profit as his sole motive.

However, we have found that the line between those of our clients who are collectors and those who are investors has become increasingly blurred. Collectors can’t help but be pleased when the coins they sell bring in a handsome profit. Investors begin to see their coins as works of art and learn about the circumstances of their minting and the era in which they circulated.

Both the collector and the investor realize that their intellectual curiosity, aesthetic sensibility, and enjoyment of our country’s past can be used to create a collection that becomes an important store of value, a way to accumulate wealth that can be passed on to future generations. or used to finance their own retirements.