Ever since the precious metals market turned decidedly bullish in 2001, rare gold and silver coin interest has increased sharply amongst investors, creating new investment opportunities as prices have skyrocketed. While some investors choose to invest in precious metals through bullion, a great number of others enjoy investing in rare gold and silver coins due to their appeal to investors and collectors alike. Investors who collect rare gold and silver coins not only make significant returns on their investments, but they also take an active role in preserving history.
The wild swings of the modern volatile stock and bond markets have driven conscientious investors towards the gold, silver, and rare coin markets. Even during normal market conditions, rare gold and silver coin investments have proven to be terrific instruments for portfolio diversification. Although rare coin investing is escalating in popularity, there are still plenty of rare coins to be found circulating around the marketplace. Investors who are able to purchase the right coins at the right price can make significant profits from investing in rare coins. However, burgeoning rare coin investors must first select an experienced rare coin dealer with a reputation for providing quality coins at reasonable prices.
The History of Gold and Silver Minted Coins
Since before the time of the Egyptians, gold and silver have been used as monetary instruments due to their rareness, divisibility, and flexibility. Thus, gold and silver coins were standardized by weight, size, composition, and shape before becoming widely used as a form of exchange. Copper and bronze coins were also produced to satiate the growing demand for coins as a medium of exchange, but due to the desirability and rarity of gold and silver coins, these coins were substantially less valuable.
In the modern era, gold and silver coins were gradually phased out and replaced by coins made of less valuable base metals. Although several governments still mint gold and silver coins, they are produced to satisfy the growing demand of collectors and investors, rather than being used as a form of currency. Due to the endless printing of paper money by central banks around the world, many financial analysts have postulated that coins should be minted with precious metals for use as currency once again, not just as collectibles.
The Popularity of Numismatics is on the Rise
The mounting debt of Western governments, especially the U.S. government, has led to the proliferation of sovereign bond purchasing by central banks around the world in an effort to stave off the imminent collapse of the global economy. With more and more paper money printed all around the world and inflation rising as a result, rare precious metals like gold and silver have significantly risen in value.
Furthermore, as aging populations, social welfare programs, and military spending continue to increase in Western nations, already overextended national debts have been projected to increase significantly in the coming years. Due to these mounting debts, U.S. and European governments will continue to exercise a monetary policy that is centered on the endless printing of paper money in attempt to cover their expenses, only driving inflation higher and higher. This widely accepted negative outlook regarding the global economic situation has led to an increasing number of investors who have been putting their money in the safe-haven investments of gold and silver, because they are projected to outperform all other assets as the printing of paper money continues to increase. Since gold and silver coins have been minted for the past 5,000 years, many investors have started investing in these coins for their rising investment and historical value.
The Best Form of Protection Against Inflation
Numismatics has proven to be a solid way for investors to protect and grow their wealth during periods of market volatility and economic uncertainty. There are many investors and collectors who prefer acquiring rare gold and silver coins as a means of diversifying their investment portfolio. By carefully selecting valuable coins, investors can add tangible assets to their portfolios that are guaranteed to substantially increase in value over time, regardless of the global economic situation.
In fact, many financial advisors advise their clients to diversify their investment portfolios with as much as 20 percent consisting of tangible assets like rare coins, because they have historically generated long-term profits during every stage of economic growth, decline, and stagnation. Thus, rare coins are often the investment vehicle of choice because of the peace of mind and security that they afford.
Throughout history, countless rare gold and silver coin collections have generated significant long-term returns for their astute owners. When compared to the other available investment options, rare coin collecting has produced substantial profits. Since the 1970s, the rare coin market as a whole has increased in value annually by over 13 percent. This figure is all the more impressive when investors consider that the rare coin market has not been subject to the same volatility as the stock, bond, and currency markets. In investing, there is never a sure thing, but rare coin investing is as foolproof as it comes.
The Future Outlook of Rare Gold and Silver Coins
It is no secret that the recent global economic uncertainty has driven up the prices of gold, silver, and other precious metals. However, when the fact that gold and silver coins have been significantly undervalued in comparison to other investment assets is factored in, the future returns from gold and silver coin investments looks quite promising. When the threat of global economic instability and increasing inflation are added to the mix, the future profit potential of rare gold and silver coin investments looks all the more promising. Not only do these investment vehicles offer promising returns, but also they often transition into a passionate hobby for many investors.
Determining the Value of Rare Coins
In general, the fluctuating prices of spot gold, silver, and platinum have very little effect on the steady increase in rare coin values. Rare coin values are determined more by their rarity and aesthetic quality than their precious metal contents. Overall, coins that are in pristine condition and from a low mintage consistently demand the highest premiums in the rare coin marketplace.
Investing in Precious Coins
The precious metal content of rare gold and silver coins may be of substantial value, but rare coin investors should seek to purchase coins that offer premium returns in the rare coin collector marketplace. Coin collectors are widely known to hunt down and pay premium prices for specific coins that will complete their rare coin collections. If you are able to purchase a low mintage coin in pristine condition for a reasonable price, you can rest assured that you will be able to achieve a very high return on your investment.
When entering into the profitable realm of rare coin investing, it is important to know the differences between rare coins and bullion coins. Bullion coins are often purchased by investors strictly for the value of their gold and silver content. Their value is predominantly determined by the current spot value of their precious metal contents. Rare gold and silver coins also have a precious metal value, but their true value comes from the coin collector market, because a rare coin collector will pay much more for a coin than the value of the coin’s precious metal contents.
Rare coins can be purchased in many places. They are often advertised in classified ads, found at estate sales, and listed at rare coin auctions. However, purchasing a rare coin from a classified ad can be very risky, and estate sales and auctions often command high prices. Purchasing rare gold and silver coins from a reputable and well-respected coin dealer is by far the best route to take.
The historical performance of rare coins has consistently proven that rare coin investments provide substantial long-term returns for coin investors. If you’re interested in experiencing these same results, contact an experienced dealer today in order to profit from the wonderful world of rare coin investing.