What's in a Name with Numismatics?

Spotlight.

Those of you who have been subscribed to us for a long time are well aware of what it means for a coin or coin set to be considered worthy of our Spotlight collection.

For years, we've worked with the industry's best numismatists to identify coins that fit this moniker.

To qualify, we consider rarity, condition, market positioning, price range, and most importantly, that each coin has a unique story from the vibrant past of American coinage.

Coin collecting can be a very profitable venture when done the right way, and these exclusive and un value opportunities in numismatics make a great alternative asset for those looking to diversify their portfolio.

Rarity
Organizations such as the Numismatic Guaranty Company (NGC) or the Professional Coin Grading Service (PCGS) collect census data on coins. Many, many gold coins were melted down in 1933, when FDR's Executive Order 6102 lead to the widespread confiscation of gold bullion. As a result, the coins that remain from the period of time from about 1795-1933 can be quite rare, especially when compared to their original mintage. When we track the remaining coins in a better condition or from a specific year that have survived, the number can be shockingly low.

When considering a coin for Spotlight, we heavily weigh the rarity versus the availability of a coin. We want to be able to offer unique and special segments of coinage types, but have enough to offer to our clients, AND keep the price within a reasonable range for the discerning, but still casual collector.

Condition
If investing in coins purely for their numismatic value, it’s important to deal in certified coins only. It can be difficult to determine the value of a coin purchased from an eBay auction, whereas certified coins guarantee a certain level of quality and will be easier to resell. Certified coins are those which have been inspected and graded by a recognized organization such as NGC or PCGS, then placed in a protective holder, known as a slab.

With certified coins, it is important to understand what is meant by a coin’s grade. Based on condition, coins can be graded from Poor, at the lowest end of the spectrum, all the way up to rare and pristine Gem Uncirculated. In addition, many appraisers use the internationally accepted Sheldon grading scale of 1 to 70, which was first used in the United States in the late 1940’s. The higher the number, the better the grade of the coin, and the more it will be worth at auction or on the open market.

Certified coin grades from best to worst are as follows:

• Perfect Uncirculated (MS-70) 
• Superb Gem Uncirculated (MS-67, 68, 69)
• Gem Uncirculated (MS-65, 66)
• Choice Uncirculated (MS-64
• Select Uncirculated (MS-63)
• Uncirculated (MS-60, 61, 62)
• About Uncirculated (AU-50, 53, 55, 58) Sometimes referred to as Almost Uncirculated.
• Extremely Fine (XF-40, 45) Also commonly abbreviated as EF.
• Very Fine (VF-20, 25, 30, 35)
• Fine (F-12, 15)
• Very Good (VG-8, 10)
• Good (G-4, 6) 
• About Good (AG-3) Sometimes referred to as Almost Good.
• Fair (FR-2)
• Poor (PO-1) Also known as Basal State.

For Spotlight, we typically identify coins in About Uncirculated or Mint State condition, which due to market anomalies are high grade and spectacular condition, but selling for slightly less than their rarity and condition should command.

Market Positioning and Price
Another factor we consider for Spotlight is market positioning. New hoards of coins are still occasionally uncovered today, which can create special opportunities to obtain certain varieties for less than their historic value. 

While numismatics are mostly uncorrelated to the bullion market, the rise or fall in gold spot price can impact the melt value of numismatic coins due to their gold contact, providing temporary boosts or drops in price. Looking at the long-term movement of a market, we are able to offer excellent Spotlight-worthy coins when precious metals enter their bear market stages... taking advantage of a fall in spot prices with the knowledge that the next bull market cycle could bring exponential increases in value.

Supply and demand of gold in general, but also gold numismatic coins in particular, can also create perfect opportunities for a great Spotlight coin. For instance, right now, demand for bullion and numismatics has taken a bit of a lull, despite gold spot prices being at an all-time high, which makes premiums on numismatic coins much narrower than in times of high market demand for gold. When Western investors enter this gold bull market in full, we expect that premium expansion for numismatic coins will go through the roof as people become desperate to own gold in all its forms. We suggest keeping an eye out for our Spotlight offers over the next few months as the window to take advantage of this overall lowering of premiums comes to a close.

Spotlight coins are priced within a reasonable range for the discerning, but still casual collector, and we only identify coins with room to grow in value over the coming years.

Numismatic Coins as an Alternative Asset
Rare U.S. coins are a commodity like few others, and there is a limited supply available. Rare coin prices are determined by what is sold around the world and rises as investors and collectors pay more for these increasingly rare items.

As a long-term investment, rare U.S. gold coins are the next step to achieving the same benefits of portability, privacy, market performance and currency protection as precious metals. Rare coins are an asset class not correlated to other mainstream, traditional assets and therefore largely unaffected by volatility and downturns in other markets.

Investors like pre-1933 U.S. gold coins for their track record of outperforming generic gold bullion in times of uncertainty. This was especially true in choppy markets like 2009 and 2013.

Unlike bullion, numismatic coins are not an investment in the typical sense. Although used as a store of wealth, their value is not always associated with the metal content spot price. In fact, numismatic coins are generally worth more than their bullion counterparts. Owning numismatic coins with precious metal content is a savvy way to turn coin collecting from a hobby to an investment strategy. Rare coins, in particular, make for prizeworthy pieces in a collection and an investment with potential for growth. 

How do I Invest in Numismatics?
Those considering collecting numismatic coins as a more serious portfolio investment should get excited because they offer a unique combination of tremendous upside potential along with an extremely low level of volatility. However, there’s a lot of misinformation out there. Counterfeit is common and difficult to detect unless you’re an experienced numismatist. Additionally, there are unsavory dealers who do not have your best interests at heart.

The good news is…you won't have to go it alone when choosing rare numismatics for your portfolio.

When the market presents the opportunity, we select a Spotlight Coin or Coin Set to highlight for your perusal, providing in-depth analysis on its value and history. The process of researching, finding, and selecting coins worthy of the Spotlight title takes months of effort before an offer is released to you. However, we only release a limited number of coins or sets as they must meet specific criteria for value. We want you to buy the “Right Coin at the Right Price” for your portfolio, your goals, and needs.

Join Our Spotlight List
Let us help you by shining a Spotlight on the best value prepositions as the market delivers them to us. 

In addition to U.S. numismatics, we occasionally are able to offer small, selective groups of world and ancient coins.

Our Spotlight frequently sells out, so email us to subscribe to our numismatic alert list for FREE for first access to rare coin offers and to continue learning about the fascinating world of numismatics.