Hot Summertime Deals: Rare Coins 2014

By Jon Swyers

As summertime approaches, we all feel the need to turn off the motor of our too busy lives and let things slide for a while. Resist the temptation, at least for a few weeks, while you take advantage of the hot deals in rare coins that may not be available when autumn rolls around.

Rare coins are not just for collectors. Truly rare coins are the 'Steady Eddie' of investing, clocking in reliable gains over time. A single glance at one of my favorite charts proves this point.

Rare coins have been a consistent performer and have shown over a 170% increase in the past decade.

What makes rare coin investing so compelling is the lack of correlation between rare coin value and pricing to any other market, including precious metals. The economic factors that shake up markets have recently resulted in most asset classes moving in lockstep. However, Rare Tangible Assets are immune from mainstream recessionary factors.

Cyclical recessions take place approximately once every eight years. If you are in stocks or other securities, these downturns take an average of 18 months to reverse and recover. And, each recovery sets you back a little further.

Rare coins provide ballast to your portfolio in unsteady times. They do not go up and down with the rest of your holdings. The bellwether of their value is their collectability. Collectability depends on personal passion, not market influence.

In this unstable market, where the price bubble in securities may burst at any moment, you will cherish every uncorrelated asset you hold in your portfolio.

Truly rare coins are not an exotic choice - they are fundamental assets for wealth protection.

The operative words are 'truly rare.' When Michael Checkan, ASI's co-founder and current Chairman, first began researching rare coins, he knew even the most research-oriented investor might mistake limited availability with true rarity.

To avoid this mistake, Michael asked Douglas Winter to work with ASI clients, as Doug is the dealer of choice for some of the world's biggest collectors and the acknowledged world's leading expert in pre–1933 rare U.S. gold coins.

The Rare Coin Program (RCP) has become one of the most popular of all our tangible asset offerings.

Rare coins, with a proper plan, are easy to manage and hold. In fact, with our Rare Coin Program, we help with the selection, storage options and eventually, liquidation of your coins. Your coins are handpicked by experts looking for great coins with great potential as part of the ASI RCP.

Now, for the 'hot deals.'

Doug has come up with coins in every price category. When you review Doug's picks, concentrate on how collector oriented he is in his thinking. The uncorrelated nature of the market jumps out at you.

$1,000-$2,500 range: Doug suggests coins that are PCGS (Professional Coin Grading Service) graded, CAC approved and dated prior to 1880. He adds, "the (collector) interest factor for coins in this price range was greatly improved when I offered large sized issues, e.g., eagles and double eagles." Specifically, Doug's picks in this price range include:

• 1852-D $5.00 PCGS EF45-Dahlonega half eagles in EF40 and EF45 condition. Doug feels, "The level of demand for nice D mint half eagles is very strong now, especially if they are choice, original coins. In the last few years, values have crept up from $1,600-$1,800 to around $2,200-$2,500+, and I see no price resistance to even higher numbers for the right coins."
• Motto New Orleans eagles, MS61 and MS62 (1888-1906)–According to Doug, "prices could go up 20-40% without anyone batting an eyelash. The possibility exists that set collecting could drive this series higher."
• Low-grade coins, in less than mint condition, but with rare dates are also in high demand and affordable. Doug reasons, "A coin like an 1861-S eagle is too expensive in higher grades for most collectors. But, a nice Fine or Very Fine can be bought for a few thousand dollars. And, if the coin is worn but cosmetically appealing, it has a strong level of demand that didn't necessarily exist a few years back."

$5,000-$10,000 range: Doug calls these his "bread and butter." They attract very selective collectors, looking for the 'it' factor before they buy. Doug has coined a phrase in the industry, Multiple Levels of Demand, to define this 'it' factor. This includes an interesting history, good visual appeal and of course, rarity.

It's not easy to find such a coin, but when you do, you have a truly hot deal on your hands. But, Doug has found these:

• 1841-D $5.00 NGC AU58 CAC-properly graded AU58 branch mint quarter eagles and half eagles. "Southern branch mint gold coins remain one of the best values in all of 19th century numismatics," says Doug. These have great eye appeal, making these coins sought after as compared to even the higher-priced MS60, MS61 and even an MS62, which can range from $9,000-$11,000.

Here again it takes an expert to understand that a lower price might be more valuable than a higher priced coin in the long run, because only an expert understands collector temperament.

• The 'Better date' Three Dollar gold piece. This series has been out of favor for quite a while. Doug believes some mild promotion could bring it to the forefront.
• 1915 $10.00 PCGS MS64+ CAC Indian Head Gold-These coins have special hot deal power because they are underpriced. The price of the next grade up, the MS65, is at least double or triple.

$20,000 or more: The market in higher priced rare coins is as strong as any time since 2006-2007. The Chinese and many other collectors are searching for high-end coins. The market is brisk.

For good upside potential, Doug suggests, "Really exceptional branch mint gold coins in MS63 and MS64. If you look at auction prices from 1999-2001 and compare the values of a coin like an 1847-C quarter eagle in PCGS MS64, then versus now, you will typically see a slight overall decline," he confides.

It is actually this price decline that makes investors smile. In Doug's opinion, a choice, original CAC-quality Dahlonega half eagle in MS63 or a beautiful, naturally toned Charlotte quarter eagle in MS64, is truly rare. Those able to take the plunge at this level are expected to see good returns as demand increases in 2014 and beyond.

Doug has his ear to the ground when it comes to collector taste.

He sees great value in truly rare 'business strikes,' coins struck for commerce as contrasted with proof coins struck for collectors. These formerly obscure rarities are now poised to increase in demand.

Doug detected this trend as early as 2013 when he listed an 1863 $5.00 NGC MS60 CAC on his website and got multiple inquiries from new sources of collectors. Two buyers told Doug they wanted the coin "just because it was cool."

It is this type of collector behavior that makes rare coin investing uncorrelated with any other investment you might make. It is also why ASI has built the Rare Coin Program to make sure you do not make the mistake that merely a limited quantity or an older date means rarity.

Doug also believes 'trophy coins,' ones that suitably combine rarity, appearance and a great story, will be in huge demand in 2014, despite their high prices. Records may be set in the million-dollar price range. Doug becomes nostalgic when he reminisces that a decade ago a million-dollar coin would make front-page news.

Today, such sales are relatively commonplace. He says, "As more 'big money' discovers the coin market, I look for many exceptional prices realized in 2014, both at auction and via private treaty."

What to do next.

As always, we recommend you start with a call to us to determine the purpose and goals of your asset allocation. Only then will Doug hand select your customized portfolio.

Please call your ASI Preferred Client Relations representative today at 877-340-0790, or send us an email, to begin this chapter in our mutual quest to help you Keep What's Yours!