The 2004 American Numismatic Association annual convention is history, leaving behind pages emblazoned with prices that reflect an ever strengthening market and optimism that would have been unthinkable only a few short months ago. "The market is so good that it's almost unbelievable," one dealer reported. "Everyone wants to do business." "Do business" is exactly what they did in Pittsburgh. Dealers reported selling more coins than at any time since the 1989-90 boom years. Collectors swarmed the auction rooms and bourse floor as well. There is no need to put a label on the activity such as a "bull market" or anything of the sort. It is sufficient to say that the market is excellent, and almost everyone is delighted with the promise that the future holds.
Spike in gold prices pushes generic gold higher. With all of the activity in rare coins has the generic and semi-generic gold market been ignored? Actually, everything is selling, and there's a lot of demand for premium dates. Anything that is a little better, such as a 1914-S $20, sells instantly. Is there a supply problem? Their doesn't seem be any market overhang. The market premium over melt for MS63 Saints is the lowest I've ever seen it. With the high demand, something's got to give.
Our game plan when it comes to investing can be summed up in a word: DIVERSIFICATION. Hard assets, like rare U.S. coins and precious metals, are extremely important in controlling the risk in investment portfolios because they have, based on past markets, tended to move in the opposite direction of traditional paper investments. Although diversification of ones overall portfolio is very important, you must also note that for maximum performance it should be PROPERLY diversified.
In 1994, a study published by the Penn State University Department of Economics indicated that (from 1974 to 1993) an investor who included gold and rare coins in a portfolio of stocks, Treasury bonds and Treasury bills would have INCREASED his or her overall return and at the same time REDUCED the level or risk. In order to properly protect and build your wealth in all phases of the business cycle (growth, inflation, recession and recovery) you should allocate a portion of your investment dollars in precious metals AS WELL as rare U.S. coins. The reason for this is that the fundamental market factors affecting each of these tangible asset sectors are actually different. Therefore each has a place in the properly diversified investment portfolio. |
