Collectibles: Your Shelter From Volatility
Earlier this year, a rare 1933 penny sold at auction for a world-record breaking £72,000 (US$95,500). The British penny was created as a prototype with the head of George V. In fact, this penny is so rare that there are only four in existence. The initial estimate expected the penny to sell for between £35,000 and £45,000.
At this year's inaugural London Quality Growth Investor conference, Denis Callioni, analyst and portfolio manager at European investment group Comgest, highlighted one of the top ideas of the Comgest Europe Growth Fund. According to the speaker, the team managing this fund focus on finding companies that have stainable growth trajectories with a proven track record Read More
With a coin, you can hold a bit of history in your hand and not to mention, something incredibly rare.
But coins aren’t just a key to another time far removed. They are a great asset, offering a way to diversify your investments outside the volatility of the market.
To properly introduce you to the world of investing in rare and ancient coins, I’ve gone in search of an expert.
Geoff Anandappa is an investment portfolio manager for Stanley Gibbons Ltd., the world’s leading brand name in collectibles, based in London, but with offices in the Channel Islands, Hong Kong and Singapore. The Stanley Gibbons Group includes the world’s oldest rare-stamp merchant (established in 1856) and philatelist to British Royalty since 1914; and the U.K.’s largest coin dealer, A. H. Baldwin & Sons (established 1872).
Jocelynn: I think most Americans are aware of the impressive size of the American coin market, particularly with regular stories hitting the newswires about rare Americans coins selling for over a million dollars. But are there other markets that investors should be paying attention to because of their growth?
Geoff: Rare and early coins from increasingly prosperous areas around the world are rising in demand from collectors in search of a piece of history. Coins from Eastern Europe, such as Russia, Poland and Hungary, have seen some prices increase tenfold in the past decade. Coins from India and the Middle East, long ignored by Western collectors, are now of intense interest. Even traditional collecting areas — such as Ancient Greek and Roman, as well as Western European and British coins — have increased over fivefold in the past decade.
Jocelynn: Where is this price growth coming from?
Geoff: Some of this demand has been stimulated by the rise in the price of gold and silver — but the bullion value of rare coins is far surpassed by their numismatic value. Far more importantly, collectors have recognized the rarity of coins in exceptional condition, and so the premium for such coins has escalated accordingly.
Jocelynn: Do you have any advice for someone who wants to start adding rare world coins to their collection? Where do you begin?
Geoff: Unless you wish to start collecting coins, rather than investing in them, it is not advisable to try to put together “sets.” Often, a set will include less rare coins that are not of investment quality, and therefore less likely to increase in price. Additionally, a set of similar coins will tend to rise (and fall) in value at the same rate. Instead, concentrate on finding rare coins, in the finest condition, from a range of different collecting areas. All of the coins should, in time, show a good return — with a few showing exceptional returns as new areas become more popular.
Collectibles: Your Solution in Uncertain Times
We’ve only just scratched the surface when it comes to using collectibles to increase and diversify your investments. Collectibles, or what we often refer to as “quiet wealth,” are a way to protect your assets not only from upheaval in the market, but also from the uncertainty we are facing with a government that has accumulated roughly $19 trillion in debt and the upcoming presidential election. In fact, collectibles are a wealth solution that we explore with subscribers of The Bauman Letter to add an extra layer of protection in these troubling times.
One great resource is Stanley Gibbons. It can advise the investor on compiling a diversified portfolio of rare coins from England, Europe or the rest of the world. Free storage and insurance are available if required, and annual valuations are provided. There are no management fees or annual charges — and commission is only payable when the coins are eventually sold.
Geoff is based in London, but you can contact him on his U.S. cellphone at 1-707-466-4999 or by email at email@example.com.
Proper planning now will not only work to protect your assets as America struggles to find its footing again, but it will also help you sleep well at night knowing that you chose to diversify your investments outside the volatility of the market.