The Power of a Penny

I think we all dream of it… walking through a yard sale and discovering a rare Picasso that the owner was sure was a fake.

Or maybe it’s a personal letter from George Washington tucked away in the attic of a house you just purchased.

Personally, I was always hoping to uncover buried pirate treasure – though highly unlikely, considering that I grew up in Kentucky rather than near the coast.

Earlier this year, one man uncovered a rare penny buried in a parsnip field in Nottinghamshire that is expected to sell for £15,000 (approximately $18,280) at auction on March 15. The penny was minted during the time of Viking king Sihtric Caoch roughly 1,100 years ago. And despite being buried in the ground for more than a millennium, the coin is in extremely fine condition.

But you don’t need to head to the rolling hills of the U.K. with a metal detector to make a nice profit in rare and ancient coins. There’s actually a much easier way to grow your wealth…

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 England but with offices in London, 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 American 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: If many of these areas are seeing such growth, should investors be worried about these rare coins being overvalued?

Geoff: Despite the strong demand and price rises, these rare world coins are still very much undervalued when compared to their U.S. counterparts. The size and prosperity of the American collector base, coupled with the relatively small number of rare coins, means that U.S. rarities go for 10 or 20 times the price of equivalent coins from England or ancient Greece and Rome – and perhaps 100 times the price of their Asian or Middle Eastern equivalents.

This discrepancy offers a unique opportunity for U.S. investors to diversify their collection with rare world coins that are seeing substantial and steady growth in value.

Jocelynn: When it comes to American coins, I know that the grade is very important in understanding the quality of the coin, and hence, its value. Does the same grading system apply to significantly older world coins?

Geoff: Most coins sold in North America are graded on a scale from 1 to 70 by independent grading services such as Professional Coin Grading Service (PCGS) or Numismatic Guaranty Corporation (NGC). This may be possible for more modern, mass-produced coins. However, grading is much more difficult and becomes more subjective with older coins – especially hammered coins where the quality of the strike makes each coin unique, even before any wear due to circulation is taken into consideration.

In England and Europe, there are essentially four grades of condition: Fine, Very Fine, Extremely Fine and Uncirculated (“Fleur de Coin” if exceptional). The terms “Good” and “About” can qualify these grades. Thus, Good Very Fine (GVF) is better than Very Fine (VF), which is, in turn, better than About Very Fine (AVF).

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.

Wealth Solutions 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 of protecting your assets not only from upheaval in the market, but also from the uncertainty we are facing with a government that has accumulated more than $19 trillion in debt and is militarizing our police force.

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.

The Value of Purchasing Copper Collectors Items

Why acquire Copper Collectors items?

Throughout history mining harvests have been hoarded to be the hedge to protect against inflation. Despite the fact that the US dollar is continuing to falter in an uncertain global economy, metals retain their worth. Now copper, regularly considered a base or industrial metal, created interest from precious metals buyers. Many expect higher demand as India and china modernize and new technologies making use of copper are actually designed. Although some people opt to invest in commodities markets, many prefer to take physical possession of the metal, honoring the option that, “If you don’t hold it, you do not own it.”

Accumulating copper products can be regarded as a critical investment, or merely as a fun hobby considering the added and unique benefit of amassing unique value. In times of economic issues many collectibles lose value due to the fact that demand falls, but copper products always hold a commodity value.

In a very very worst-case scenario, should hyperinflation strike the us government dollar as it has with numerous fiat currencies before, many believe precious metals and copper products provides a way of bartering for other services and goods.

Precisely why are Copper Bars so Expensive?

There are many factors that trigger what appear to be high premiums on copper bullion as compared to the spot price shown for paper markets.

The first factor would be the fact copper is no easy task to process. Unlike gold and silver, which melt efficiently and do not oxidize easily when melted, copper oxidizes readily especially if heated. It entails the usage of special methods or chemicals to provide pure copper without bubbles or contaminants being created.

Due to this extra handling, uncontaminated copper is not easy to accumulate anywhere close to the raw market trading price unless you have a contract to opt for a typical shipping and delivery of multiple tons each month. Factor in the expense of processing, sizing, finishing, stamping or engraving, and shipping, and the price has reached the level you see on my web page.

Though there is a premium as opposed to the spot price for copper bullion, the same is true for silver and gold. In this particular market it seriously isn’t unusual for the premiums on silver coins to exceed $4 – $5 per ounce, and gold is regularly selling for $50 – $60 an ounce over spot. Looking at our popular 1 ounce copper rounds in terms of the premium over spot on copper, is significantly less than the premiums on both silver and gold.

The New-Age Investment – Alternative Investment

Alternative Investment implies investing in assets other than the traditional methods such as stocks, bonds, cash, etc. These could be private equity, hedge funds, real estate, commodities, precious metals, wine, art, etc. These type of investments are held by high net worth individuals, or institutional investors. The addition of this type of investment to the portfolio allows diversification, reduces risks and enhances returns.

The performance of assets used in alternative investments is relatively lower when compared to those in the traditional methods. They are relatively more difficult to value. They are also less liquid when compared to traditional methods.

Some popular types of alternative investments being widely used are:

Private Equity:

This can be defined as investing in private companies such as start-ups, venture capital, and financing throughout phases of the company’s growth. This investment is done in companies that do not issue public stocks. These firms raise funds through capital invested by institutional and non-institutional investors.

Direct Investment in Private Companies:

This implies investing in a start-up or a private company directly instead of the equity. This is a high risk and high return proposition.

Real Assets:

This implies investing in physical assets which are of high value. Examples of such assets are precious metals, real estate, oil, wine, art, jewelry, etc.

Hedge Funds:

In this case, funds are collected from a number of investors to form a common pool of funds. These funds are invested using different types of strategies to earn the return on investments. They have the advantage that they need less SEC regulations than other funds.

Managed Futures:

This is similar to Hedge funds where a common pool of investor’s funds is created. These funds are invested in various financial instruments such as commodities, currency and interest rate markets.

Financial Derivatives:

A financial derivative is an arrangement where the investor is promised a payment when a certain asset reaches a certain level. These securities include futures, options, forwards and swaps.

Fund of Funds:

This is a means of diversifying investments. It is achieved by investing in multiple managers, asset classes or strategies.

Private Placement Debt:

Investors can receive a steady cash flow by investing in a private company through promissory notes.

As the stock market becomes volatile and unpredictable, people are seeking safe investment methods. At such a time alternative investment schemes have come to a safe secure option to private investors. Therefore, they are becoming highly popular. However, they cannot replace traditional methods completely. They should be used to complement them. This will help to increase and diversify the investment portfolio and minimize the risks of investment.