Education

Investing in Precious Metals: Numismatic Coins VS Bullion

Posted on by webeditor
20
Feb

What is the Difference Between Numismatic (Rare) Coins and Bullion?

How to Properly Invest & Diversify into Precious Metals

Many of the clients that we speak to either haven’t invested into precious metals yet or only hold bullion in their portfolios. Bullion can act as a great hedge against other traditional investments such as stocks, bonds and mutual funds, however bullion doesn’t provide the same upside potential and diversification as numismatic (rare) coins.

 

Definitions:

  • Bullion comes in the form of bars and modern-issue coins (Gold/Silver Eagles, Canadian Maple Leafs, Chinese Pandas etc).  The coins typically weigh 1 ounce while bars can range from 1 ounce to 1,000 ounces. Bullion investing is typically more aggressive and therefore more risky.

  • The most actively traded Numismatic (Rare) Coins are either gold or silver, with Pre-1933 Gold and Pre-1933 Silver being the most common.

  • Investment Grade coins are encapsulated in a sonically sealed case with a label that describes the type of coin and has a rating that ranges from “MS 60” to “MS-70” (Mint State).

 

Key Points to Understand Regarding Rare Coins:

  1. They are valued for their rarity rather than weight.

  2. Less volatile than bullion (as they don’t trade on an index).

  3. Not subject to manipulation by banks or the Fed.

  4. Driven by supply and demand (just like ocean-front real estate, classic cars and fine art).

  5. Safety net to shelter assets from market swings, seasonal trends and crashes that are common in stocks and other investments.

 

The Best Types of Rare Coins to Invest in:

Similarly to stocks, there are thousands of types of rare coins to choose from and it is important to pick the rights ones in order to maximize your returns. This is why our firm specializes in building portfolios around Investment Grade pieces such as:

    • $20 Saint Gaudens

    • $10 Liberty Heads

    • $2.5 Indian Heads

    • Morgan Silver Dollars

    • Seated Liberty Half Dollars

Portfolios weighted in Investment Grade coins are more secure and conservative, being better suited for long-term investors.

 

Diversification is Key

  1. DIVERSIFICATION is the #1 reason people give for accruing precious metals.

  2. Bullion investors should always have Rare Coins in their portfolio.

  3. Position the portfolio to protect it from volatility and position it for superior long-term growth.

 

Tailored Investment Solutions Based on You

Every situation is different and we customize our recommendations based on 3 main factors:

  1. Tolerance for risk

  2. Time horizon/Liquidity Requirements

  3. Investment Philosophy

Our team at Platinum Galleries can help you design and implement an investment strategy to maximize your upside potential while minimizing your downside risk.  We will take the time to educate you, answer your questions and help you navigate the precious metals markets without the high-pressure salesmen.

webeditor