Investment class rare coins

Wall Street Journal reviews coins
Published : 01/09/12
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Each year Coin World provides the Wall Street Journal with a “Classic U.S. Rarities Key-Date Investment Index” for use in its annual investment scoreboard.

The scoreboard tracks different investment groups including stocks, bonds, mutual funds, bank instruments such as certificates of deposit, money market funds, precious metals, residential real estate and top investment grade rare coins.

The 2011 scoreboard was published in the Dec. 30 year-end review of markets and finance.

Coin World’s rare coin investment index features 82 rare, high-grade coins: 15 copper coins, five copper-nickel pieces, 39 silver coins and 23 gold coins. In 2011 the 82 coins in the basket had a total value of $13,693,625; their value represented a substantial leap over the portfolio’s initial 2005 value of $7,722,435.

The index shows what coin collectors over generations have learned: that rare coins in well-preserved condition appreciate in value over time and can serve as a store of wealth. However, the price performance of rare coins, as for all investments, moves in cycles.

In 2011, Coin World’s rare coin index gained 4.98 percent overall, compared with a 10.3 percent gain in 2010, a 7.9 percent loss in 2009, and gains of 15.8 percent, 31.9 percent and 8.8 percent in 2006, 2007 and 2008, respectively.

In 2008, rare coins were among the few investments that registered a gain on the scoreboard, while in 2009 rare coins as measured by the index were among the scoreboard’s worst-performing investments as the housing and investment markets rebounded.

For rare coins in 2011, the copper segment posted a 1.96 percent gain and silver coins showed a .05 percent gain, while rare gold coins increased 8 percent.

Overall, the rare coin portfolio’s 4.98 percent gain placed it in the middle of the scoreboard, nearly matching stock performance, outperforming mutual funds, bank instruments, platinum, silver, and residential real estate, but outperformed by bonds and gold.

As talk of rare coin investment funds and record-setting six- and seven-figure sales, both at auction and privately, bring attention to the rare coin market, the high end should continue to appreciate, and the key factors seem to be in place for 2012 to build on the successes of 2011. ■

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