Confirmation that the investment Quality Rare Coin Market has indeed hit bottom and beginning to rise.
The annual January Florida United Numismatist (FUN) show—usually the largest coin show and auction of the year—has always been a harbinger of the new year and this year was no exception.
Market update reports for the last two years have reported a sluggish coin market which has been negatively affected by a strong dollar and resultant low gold bullion values which again tested the $1050 mark.
This was coupled with an unusual surfeit of high end rare coins from at least four major collections being auctioned over the last eighteen months. These resulted in strained dealer capital and absorbed collectors’ funds. So we approached the FUN show with some trepidation.
We were pleasantly surprised. For four days we experienced constant activity– both selling and buying– from discriminating collectors and a few dealers—some of whom we have not seen in years. They were paying full recent market prices or even a bit more for the best material.
To be sure many dealers who are currently loaded up with fairly common coins and who resisted adjusting their prices to reflect recent downward trends, had poor shows. But for us, that only reflected some great buying opportunities as we were able to immediately sell 75% of the coins we purchased at the show or auction.
One of our purchases was the very rare (six known) and extremely popular 1943-S “Copper” penny. (The government was only officially minting zinc coated steel pennies at the time so they could use copper for the war effort). This PCGS AU-55 specimen brought $100,000 less than price records would indicate, but “fell through the cracks” with so many other rarities available. (We have yet to publicize this exciting purchase –now with a CAC sticker–but already have interested buyers).
So dealers with little capital are hurting and some of us are cashing in on some great opportunities. Still, there were barely enough really nice coins that fit our high standards to fill our orders. For the first time in a couple of years we were forced to stretch for truly special coins.
That indicates to me that the market is quite solid and due for a rise from current levels.
Investors getting a double benefit
Last year when I published my book, Profit from Gold and Rare Coins Now, I believed that investment quality rare coins were close to hitting bottom and poised for a long term bull market. I stated that now was the time to be diversifying into gold and rare coins. It turns out that my prediction was premature—by about nine months.
But in the last quarter of 2015, it seems my message has resonated not only with collector/investors but also with some high net-worth investors looking for alternatives to the traditional financial and real estate markets.
And of course it didn’t hurt that there has been a major stock market adjustment recently. Last week more than one investor thanked me for motivating them to “cash out” some securities last month thus avoiding a 10% price adjustment, while picking up some great coins that have minimal risk of dropping further in value.
Over the last year I have been asked to speak at several investment conferences. At almost every one I have been greeted with excellent feedback and interest, but with only a modest number of many requests to start an investment coin portfolio.
Until a few months ago.
I am now seeing a trend to diversify into this less volatile, private and solid tangible investment. New clients are making regular purchases of bullion coins such as American Eagles (at just 1% over our cost) and gem certified (MS-65) U.S. $20 gold pieces at 50% over melt (at 2 ½% over cost) as a store of value or “financial insurance” and as a hedge against a potential softening of the dollar. Others like the privacy of owning tangible assets outside the banking system.
What is especially gratifying to me—a collector, dealer and numismatic historian for over a half century—is that many of these new high net-worth investors, who are beginning to get their feet wet with investment quality rare coins, are finding out that they like owning these beautiful, historical coins and bank notes and want to learn more.
Some investors are even asking for certain types of coins that they find especially interesting or beautiful for their future purchases.
I am confident that this increase in activity will accelerate and that this is the beginning of a very long term rare coin investment bull market.
If you have been waiting on the sidelines to find the right time to assemble or add to your rare coin portfolios, now would be the time to jump in.
Contact me personally to help you develop your personalized rare coin portfolio for as little as 5% over our cost.
Happy New Year
Don
415-435-2601
Don@Kagins.com chill out with baccarat
