Investment professionals recommend 10-20% (and sometimes higher) of an investment portfolio be devoted to tangible assets in order to maintain diversification‚ reduce overall risk, and create a hedge against inflation. Investing in rare coins and owning hard assets should be one of the foundational elements of any portfolio.
There is little history of dramatic, sudden price shifts with truly rare and popular rare coins. This is partially due to the huge collector base, which is an estimated 35‚000‚000, and new ones entering the market all the time. Collectors and investors create a steady‚ consistent demand for the coin market. Further, because collectors and investors take physical possession of their coins‚ there are no destabilizing forces that exist in other markets.
Despite consistent price gains over the years, rare‚ popular, and historically significant coins are still affordable for the masses.
Since coins have commemorated heroes‚ great achievements, and significant events throughout history‚ a collector or investor is essentially purchasing a piece of history and a piece of art.
It is estimated that only 2% of all the rare U.S. coins ever minted still exist. This existing supply is consistently being reduced as collectors/investors buy more‚ hold them longer, and take them off the market. Experts determined there was about 100,000,000 collectors/investors worldwide in 2015, and nearly three times that number potentially exist today. Since there will be no more new coins available for these new collectors/investors‚ prices should continue to rise to meet the increased demand.
Rare U.S. coins have become the most liquid of collectibles due to independent grading by the Professional Coin Grading Service (PCGS) and Numismatic Guaranty Corporation (NGC). With over 35‚000‚000 buyers and sellers in the market and annual estimated sales of more than $5‚000‚000‚000‚ there are abundant opportunities to liquidate rare coins when the time comes. [While rare coins can be liquidated relatively quickly‚ they are not meant to be speculative or short-term investments. Investors should view rare coins as a long-term investment equaling five to seven years or longer. The longer the investment is held‚ the better the investment is likely to perform.
The value of most U.S. rare coins is almost solely based on condition‚ demand, and rarity. However, rare coins also possess the security and intrinsic value of bullion. We will never see the government having to bail out gold.
In 1933‚ with one exception‚ taxpayers were required to turn in all gold to the government when private ownership was banned. Coins struck before 1933 were the exception. The government still has the power to ban private ownership of bulk gold coins like the Krugerrand‚ American Eagle, and similar types of gold bullion coins. But‚ by law‚ private ownership of rare U.S. coins struck before 1933 cannot be prohibited.
There are no reporting requirements to any federal‚ state, or local governmental agencies as a consequence of a purchase or sale of a rare coin. A true private storage of wealth!
A small box can hold a substantial value of rare coins‚ and since coins are in bearer form‚ they can be transferred quickly‚ easily, and confidentially.
Coins can only be taxed when profits are actually realized‚ and there is no taxation on undistributed profits. There is no federal income tax liability on like-kind exchanges. These are key considerations in light of the ever-increasing taxes imposed on the American public.
While past performance is no guarantee of future results‚ it is well documented that rare U.S. coins have generated strong long-term increases of value. Rare coins only get rarer and‚ consequently‚ more valuable. The U.S. rare coin market offers outstanding growth potential.
Rare coins are essentially management-free investments that do not require daily buy/sell decisions or monthly statements to decipher. There is no need to think about interest rates‚ the national debt‚ credit crises, or a myriad of other economic issues. The long-term trend for rare coins has been‚ currently is, and will continue to be UP!
As the United States faces extremely troubling financial problems not easily solved, such as the mountain of new debt, a continuing credit crisis, and mortgage failures, getting serious about investing in rare coins is an economically smart move.