Coin Investing – How Rare Coins Can Serve as a Portfolio Hedge

By Douglas LePre – Senior Portfolio Manager at Blanchard and Company, Inc .....
 

Today’s rare coin market has the highest number of active investors looking to diversify their financial portfolios than any other time in history, and each of them has entered the market with various goals. Some are looking for gains, some are building legacies to leave for their heirs and some are just looking for a safe haven from equities, the dollar and the banks. Regardless as to their motivation, investors are looking at rare coins as important investments, and certain segments of this market have proven to be a great hedge for people’s portfolios.

coin-group-aHistorically, many investors looking for a hedge have turned to the big three precious metals – silver, gold and platinum. But these markets have dramatically changed over the last five to 10 years. So the question becomes how should an investor hedge a traditional portfolio while maintaining liquidity and keeping volatility at bay? The dictionary defines a hedge as: an act or means of preventing complete loss of a bet, an argument, an investment, or the like. So, a hedge really isn't about growth as much as it is about providing stability when markets become instable. The rare coin market holds far more hedge tools that most are aware of. Here are a few of the most efficient:

Semi-Key Date Rarities

Semi-key date coins are exactly what they sound like. They are coins that are considered too rare to be classified as generic but are still not as elusive as the rarest key dates. Every issue has its semi-key dates. Not only are they fun to research, but they work especially well as a hedge.

Private and Territorial Gold

oregon_goldDuring the California Gold Rush miners were challenged with discovering safe and economical means of getting their gold to the east coast for assay and coining. The desperate need for a branch mint had been outweighed by a combination of politics and sectional rivalries. The federal government refused to authorize a mint for any of the gold mining areas. While the U.S. Constitution expressly prohibited the states from issuing their own money, there was no law against individuals doing so, hence the existence of this very intriguing portion of the market. Even with the decline in the value of gold over the last four years, the values of these types of coins have remained steadfast.

Carson City Coinage

ccgoldCarson City coinage has always had the ability to stand on its own and has never had to rely on a market maker in order to achieve its status. Simply said, this is an issue that is appealing to both investors and collectors alike due to its amazing history, popularity and rarity. It remains very steadfast in the market, including silver dollars or gold issues such as eagles or $20 Liberties.

Owning anything from the Carson City Mint largely ensures its equity is safe.

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These are just a few of the areas in the market that can fill the need for a hedge tool without the volatility that exists in the equities. The process of finding what to purchase first starts with identifying the motivation for the buy before ever spending a dime. A trusted professional can help.

About Douglas LePre

Douglas LePre has been servicing clients of the numismatic community for 30 years and has a comprehensive understanding of the marketplace and its products. Having placed some of the scarcest coins in the market Douglas has established himself as someone who recognizes quality and makes every effort to ensure that his clientele get the highest class of rarity for their portfolio.

Douglas LePre
Senior Portfolio Manager
Blanchard and Company, Inc.
866-796-9692
dplepre@blanchardgold.com
 


Carson City Gold Coins Currently Available on eBay

eBay
 Pic Title Details
1874-CC $5 Carson City Liberty Half Eagle gold NGC G4 CAC RARE~!!! Current Price: $1495.0
# of Bids: 0
Ending: 6 days 18 hrs 52 mins
1895 Liberty Head Gold Half Eagle $5 MS 62 NGC Current Price: $435.0
# of Bids: 0
Ending: 26 days 1 hr 54 mins
1891-CC $5 PCGS AU53 - Popular Carson City Gold Eagle Current Price: $1350.0
# of Bids: 0
Ending: 16 days 11 hrs 58 mins
1876-CC LIBERTY DOUBLE EAGLE TWENTY DOLLAR GOLD PCGS 30 OGH CAC Current Price: $3799.99
# of Bids: 0
Ending: 7 hrs 31 mins
1879-CC $5 NGC VF30 - Scarce Carson City Issue - Liberty Half Eagle - Gold Coin Current Price: $2770.0
# of Bids: 0
Ending: 9 days 8 hrs 24 mins
1907 $10 Gold Liberty Samaszko's Carson City Hoard MS61 NGC Current Price: $805.0
# of Bids: 0
Ending: 16 days 1 hr 49 mins
 View all items...(Powered by: WP eBay Ads)  

1 Comment on "Coin Investing – How Rare Coins Can Serve as a Portfolio Hedge"

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  1. db tuner says:

    How can an article on rare coins not mention graded coins? Buy PCGS or NGC graded coins. If they are for a portfolio then buy them in the investment grade of MS65 or higher. Lower grades tend to follow bullion exclusively and as such are a limited hedge.

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