You should invest in certified rare coins today because the US paper dollar is vulnerable. Uncontrolled government spending, worldwide political unrest, and liberal politics threaten the American way of life. With higher energy costs, higher housing costs, and higher wages the only reasonable conclusion is that inflation is right around the corner. We also know that hard assets like precious metals and rare coins are the ultimate protection against paper money. The bullion end of the question is simply a choice between the US Gold Eagle, the South African Krugerrand or other popular bullion coins. But what about the right rare coin choices? That choice is a big part of protecting you against inflation. Why? Because history has shown a much larger price appreciation for well chosen high grade rare coins with solid fundamentals.

WHICH ARE THE VERY BEST COINS?

Which coin should I buy for long-term investment and capital gains? That has to be the most asked question in this store over the past two decades. In fact no person knows for sure, but there are proven parameters, which anyone can follow that will lead you in the right direction. Road signs, if you will, that I follow to choose the right rare coin investments. Such rules produce these “blue chip” choices that are the favorites of professionals.

Are these rules of the investment road difficult or secret? Absolutely not, and in many cases they are just common sense. But beware because many informed investors somehow throw these simple rules to the wind. So here are a few relationships and guide lines to use before investing your hard-earned money. Rules that if carefully followed will dramatically increase your chance of profiting in the next rare coin boom. A boom, which I believe, is right around the corner, if history is any guide.

THE RARITY VERSUS DEMAND SECRET

You would think that such things as rarity and price are pretty basic, and everyone would agree as to their importance when it comes to choosing the best coins. But just the opposite is true for a number of reasons. First, the investor should understand that rarity by itself is not the best way to approach investing. Rarity is good, but if there is no demand for a coin its rarity will be of little value. So it’s of paramount importance to link rarity with demand. Why? Who cares if a coin is rare if no one appreciates its rarity? Before you add a rare coin to your portfolio be sure it is popular. Some of the best investment coins may not be rare, but their popularity is so great that everyone wants an example. Thus upward pressure on the price is easy to understand, and price momentum better sustained.

WHICH GRADE IS BEST?

For those just starting let’s consider a few fundamentals. Most investors know that all investment coins must be PCGS (The Professional Coin Grading Service) certified. Yes, there are other grading services, but PCGS is the leader. So if a friendly coin dealer tells you to consider other services show caution. Coins graded by The Professional Coin Grading Service are, on average, worth more when selling, and enjoy a wider market. So why settle for less? After all it’s your money and it’s an investment rule.

That being said, consider what makes grade or condition so important. All rare coins today are graded using the Sheldon Scale from 1 to 70. The higher the number the better the condition and the rarer the coin. As rarity and popularity increase, so does price. So the cornerstone of modern coin investing is relative condition. We are talking about how perfect the coin is in terms of marks or abrasions. Remember that desirability and rarity drive this market. Investors strive for coins in superb condition, and will always pay for quality.

Now we know the better the condition the more money a coin is worth, but where do we draw the line as far as cost? Most modern investment coins fall somewhere between MS-63 (Choice Uncirculated) and MS-67 (Superb Uncirculated). The usual rule is to invest in the highest grade you can afford. But let’s not get carried away. There must be a balance between the price of a coin and its investment grade. In smaller gold coins, for example, MS-63 and MS-64 grades seem appropriate, while in larger $20 gold coins grades of MS-65 and MS-66 are a better choice. In most silver coins, however, a grade of MS-65 or MS-66 represents good value relative to old highs.

INTERESTING STORIES ARE IMPORTANT

An investment coin with a story is always better than one without. Stories and the history behind them are important because they bring these real treasures to life. Not just for you, but more importantly for the next buyer of your coin. The more compelling the coin story the better your opportunity for profit. It’s like location in real estate. An interesting or historical fact that relating to your coin is like ocean front real estate. It creates demand and insures attention. This in turn provides more bidders which tend to push prices higher over time.

WATCH PRICE HISTORY LIKE A HAWK

Price history, or what a rare coin sold for in the past, is important. Most rare coins today have accurate price charts that go back to 1986. Ask to see them before you invest. This rule should never be forgotten because it gives the buyer a great way to judge price and allows a reasonable guess as to where the coin is heading given another round of inflation.

ALWAYS USE MARKET CYCLES

Using market cycles to your advantage is probably your most powerful investing edge available today. And the research provided by The Professional Coin Grading Service smoothes out this road to a great degree:

“The rare coin market moves in very definitive cycles. Since 1970, there have been three complete Bull and Bear market cycles. The list below gives the average price movement for US rare coins from each market top to bottom.”

      Jan of 70 to Aug of 74 Bull Market Prices Up 348%
     Sept of 74 to Dec of 75 Bear Market Prices Down 23%
     Dec of 75 to March of 80 Bull Market Prices Up 1195%
     April of 80 to June of 82 Bear Market Prices Down 47%
     July of 82 to June of 89 Bull Market Prices Up 665%
     July of 89 to Dec of 94 Bear Market Prices Down 74%
     Jan 1994 to Jan 1999 Mixed Market Up 13%
     Feb 1999 to Dec of 2001 Bear Market Down 11.3%
     Feb 2001 to Present Bull Market Up 28.4%

People who develop a buying strategy are much better equipped to profit. They appreciate a long-term plan, which takes advantage of natural “up” and “down” markets. These types of people make the best investors because they are not too concerned with the latest inside discovery. They know it is better to stick with tried and true methods. A coin, which is rare today, will be rare tomorrow. Here is another excellent rule to keep in mind: “Don’t wait to buy quality coins. Buy quality coins and wait.” Patience in this market is golden, and history has proven time and time again that the big money payoff comes to those who invest over the long term. The long term approach insures the investor and collector will take the most advantage of an increasing audience and by definition a decreasing pool of available material.

So can we guarantee a profit? Of course not, and I will be the first to say that past performance does not guarantee future profits. But I believe that the past performance of coins, just like stocks, is worth watching. It is a great indicator of many things, including where the public has put its money in the past. Such information is insightful and valuable.

THE KEY IS LOOKING FOR VALUE

Price history is important in your judgment as to whether a coin represents value. Today many solid rare coin investments can be purchased at 30% of their old 1989 highs! In other words there are terrific values out there which represent discounts of 70% of old highs. On the other hand there are coins which are trading for more than their 1989 boom year prices! We suggest that true value centers around blue chip certified coins which can be purchased for less than their old highs.

And always follow The 50 Year Rule: This approach is simple and powerful because it keeps the investor focused. Never invest in any rare coin which is not at least fifty years old. This is important because it takes such time to establish a sound track record regarding demand and price. Armed with this information it is easy to see if your getting a pig in a poke or a true rare coin with significant value.

CHOOSE COINS OF SIGNIFICANCE

It may sound funny but you would be surprised at how faddish rare coin investment can be if you don’t have the facts. Stay away from unproven trends and new coins with unproven records. Stick with the tried and true, remembering that what was rare and popular forty years ago will also make the grade forty years from now. What is not rare and desirable today will be the same in the future.

THE CNI TOP TEN RARE COIN CHOICES:

1. The 1907 $10 Indian gold piece No Motto variety in PCGS MS-63 is an exceptional investment coin. The $10 Indian design was minted from 1907 through 1933 and today is considered a classic in coin design and artistry. This particular $10 Indian gold piece is special because in 1907 the motto “In God We Trust” was not included in the design. Thus a famous variety was created. It is 30 times as rare as the With Motto variety yet costs less than 3 times more. This first year of issue traded like hotcakes in 1989 and is still elusive today! In PCGS MS-63 it sells today for $3400 so it’s packed with value and big upside if you are patient.

2. The PCGS MS-63 $2 ½ Liberty gold piece is another favorite. This series was struck between 1840 and 1907 and is an American classic. It is the rarest coin of the 8 piece gold set, yet sells for less than half of the more expensive $5 Indian and has a lower population! In last years market we stopped taking orders on 8 piece gold sets because we could not find enough examples of this coin. Now add that nice $2 1/2 Liberties in PCGS MS-63 are difficult to find because they were heavily used in the commerce of their time. In 1989 the all time high for this jewel was $2500 so today’s price of $1050 makes it a “must have”. This is a fine example of how inside information can be used to make a great investment choice which is within the reach of most people.

3. For the money you can’t beat the 1926 $2 ½ Sesquicentennial commemorative gold piece in PCGS MS-64 at $1300. This coin celebrates the 150th anniversary of American independence and provides an unexpected premium. In 1989 it traded for $5000 so today’s price represents excellent value. And here are two more compelling reasons to make this gold coin part of your holdings. First, an amazing 77% of the original mintage was melted! Second, many of the remaining examples were mistreated making high grade coins like this one difficult to find. Now consider that this coin was designed by John Sinnock who also designed the Roosevelt dime and the Franklin half dollar so its pedigree is impeccable.

4. I also recommend the 1908 No Motto Saint Gaudens $20 gold piece in PCGS MS-65 at $2875.00. This coin was struck in two years as opposed to the more common With Motto type struck for 23 years! It is 3 times as rare but its current price level represents no premium over the normal price of the With Motto. Its high in 1989 was $5000 so today’s level looks very inexpensive. President Teddy Roosevelt felt that inclusion of the motto “In God We Trust” would offend the Almighty and so by Presidential decree he left it off the first coins struck. The public was outraged and believed him to be an atheist so his position was quickly reversed, creating a famous story.

5. The 1909-S VDB Lincoln Cent in PCGS MS-65 Red is a powerful investor’s coin, one which goes against the trend. Its price today is at an all time high but the coin is so popular it does not matter! If you collected coins as a kid, this was the one you could never find! The initials VDB stand for the designer Victor David Brenner and were only included on a short run of cents in 1909. Now a classic 20th Century rarity, with a terrific price record this famous rare coin has it all. It sells for $7200 today and will always be a numismatic treasure. This coin has always been a win-win situation, but there is one draw back: There is never more than one in stock and in many cases this fellow is wait-listed so be patient.

6. Another classic of the 20th Century is the 1921 Peace Dollar in PCGS MS-65. When the Peace dollar replaced the Morgan dollar in 1921 the mint tried to produce the coin in high relief. A great idea, but in practice such relief was difficult to strike and bankers complained the coins did not stack well. So a lower relief was used beginning in 1922. The 1921 Peace dollar is a one year type, not often seen and is a spectacular looking coin in the bargain! Today it can be purchased for $1750, a bargain considering it traded for $7000 during the last big run in prices. It's designer Anthony de Francisci was an Italian immigrant who used his wife as a model for Miss Liberty.

7. Investing with the goal of completing a set of coins is another fundamental good rule. Sets in this business provide an extra punch of added value. That is why I have included my favorite set of 20 coins: Called the Walking Liberty Short Set this collection contains 20 different half dollars from 1941 through 1947 in PCGS MS-65. Selling for $6100 today this powerhouse traded for $20,000 in 1989. The total number of possible sets would be limited to the lowest PCGS population date in the set which is the 1941-S (1137). This combination is tough to beat. CLICK HERE to read more.

8. The 1883 No Cents Nickel in PCGS Proof-65 at $1100. Often called the Racketeer Nickel because the word Cents was initially left off the coin in 1883. The mint believed the Roman Numeral V on the reverse would indicate the coin was a nickel to the public. In fact a few enterprising promoters seized the opportunity by plating these coins gold and passing them off as a “new” $5 gold piece. The most famous of these stories comes from one Josh Tatum, a deaf mute who simply handed the gold plated coin to a merchant and waited change. Later prosecuted, Mr. Tatum beat the case in court because he could not talk and therefore did not represent the coin as a gold piece! He made himself famous as well as the saying “Don’t Josh me…”.

9. The 1917 Type 1 Standing Liberty 25 Cent Piece in PCGS MS-65 Full Head at $1350 is also an excellent choice. This coin has a most interesting story associated with it in that when its designer Hermon A. MacNeil first conceived Liberty’s image he portrayed her holding a defensive shield in her left hand and an olive branch in her right. This magnificent first design, now called a Type 1, showed an exposed breast of Liberty, and a rather Victorian public demanded something more modest. He then covered her with chain link armor and created the more common Type 2 variety. During the last run this coin saw a high of $2500.

10. The Peace Dollar in PCGS MS-66 at $660 is also a winner for a number of reasons. First, all high grade silver dollars have immense public appeal and recognition. Silver dollars have been a number one choice for collectors and investors since people began to look at hard assets to protect their savings. Second, if you compare Peace dollars to Morgan dollars you will find the later Peace dollar is actually much harder to find in this very high grade. I like PCGS graded MS-66 Peace dollars because this coin traded for $5000 in 1989 so today’s price is like getting an 86% discount from old highs. Another example of how smart investors put this undervalued market to work for them.

Keep in mind that not all of these PCGS certified rare coins are always available and prices can change without notice. We also have long-term price graphs on all of these coins showing not only excellent entry pricing but good timing as well. Thanks for reading and please call with any questions.

California Numismatic Investments
Dealers in Quality PCGS Rare Coins And Precious Metals
525 West Manchester Blvd.
Inglewood, CA. 90301-1627
Toll Free Real Person: 1-800-225-7531 • FAX (310)330-3766
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