Amid escalating demand for alternative investments, determine if the historical rare coin asset class ‘fits’ your personal needs and long term investment goals.
(Merilee Kern MBA / 401 G.C. Sep. 2022)- With an alarming level of uncertainties across-the-board courtesy of the COVID-19 pandemic, coupled with a return to high market volatility and unprecedented global economic stimulus, investors are increasingly seeking alternative investment strategies. In fact, a recent Chartered Alternative Investment Analyst (CAIA) Association trends and forecast report underscores, among other highlights, how alternative asset classes can help responsible investors reap the long-term benefits of both risk mitigation and return enhancement. So strong the outlook, CAIA Association members expect alternatives to grow to between 18% and 24% of the global investible universe by 2025.
Even so, CAIA does concede that “as we enter a new decade rife with a global pandemic, the most violent bear market in history and unprecedented uncertainty, alternative investments continue to be a polarizing topic.” This truth is certainly exacerbated by the reality that there are relatively few alternative investment vehicles that are widely regarded as “safe.” The category does offer a diversity of options, from private equity or venture capital, to hedge funds, to real property and commodities.
However, the pandemic has spurred fresh demand for tangible assets like rare coins, which are garnering attention all their own. Rightfully so, as they are regarded as a commodity-like investment where sentimental value may exist, but are also a tangible that can produce attractive financial returns. This as outlined by FinancialPoise.com, which substantiates the many reasons why having coin collectibles as an investment can be a great way to diversify your portfolio and cut down on risk, given it’s an asset class proven to weather storms while also performing with market-like returns.
While the novel coronavirus was sweeping its way across the globe and making financial markets worldwide shudder in its wake, rare coin “prices and participation have risen rapidly since the beginning of the pandemic,” according to Mark Salzberg, chairman of Numismatic Guaranty Corp. (NGC), in a September report. It further cites that, “The number of sets has risen to more than 175,000, up 40,000 from the beginning of the year,” as well as the fact that the NGC Registry—a free online platform where collectors compete for recognition and awards—has increased its membership base a full 33% in 2020.
” alt=”” aria-hidden=”true” />Of course, the sustained and even escalation in demand for United States rare coin investments is no surprise, as they are historical artifacts that have survived the test of time. Collectors become captivated by why and how they were made, the intrinsic beauty of each and the history and lineage behind—and oft unique to—every piece. The thrill of the hunt to locate these treasures often morphs into healthy obsession, as this emotional driver fuels a great passion among those who dedicate a part of their life to owning these precious historical artifacts. A few prominent collectors from the past few hundred years are known or said to include heads of state such as John Quincy Adams and King Farouk of Egypt; financiers Louis Eliasberg and Harry W. Bass Jr.; real estate developer Brent Pogue; sports team owners Dr. Jerry Buss and Larry H. Miller; and actor Buddy Ebsen, co-founder of the Beverly Hills Coin Club. Even celebrities and star pro sports athletes known to dabble in coin collecting—the so-called “Hobby of Kings”—include Academy Award-winning actress Nicole Kidman, Emmy-winning actor John Larroquette, actor James Earl Jones, NBA all-time leading scorer Kareem Abdul-Jabbar and NHL Hall of Famer Wayne Gretzky.
With this rise in demand and interest also comes questions and concerns, the most paramount of which is determining if including these historical assets in one’s asset allocation will help realize true value in their investment portfolios.
Posted by :
Jack Dempsey, President
401 Gold Consultants LLC
jdemp2003@gmail.com
401 Gold Consultants LLC has been buying precious metals for over (30) years and all have brokerage backgrounds with experienced IRA trading personnel too.
Make the move to a real asset, buy gold.