Collecting Coins

COIN MERCANTILE PHILOSOPHY

Most people tend to view the buying and selling of collectible coins as only a collector’s or hobbyist’s endeavor. At Coin Mercantile, we view it as having the potential to be much more. If done properly with a disciplined and methodical approach, collecting coins can be an equally rewarding investment strategy that can be an excellent asset class in which to participate to enhance overall investment returns of a diversified portfolio over an intermediate or long period of time.  Remember, there are never any guarantees that your coin or collection will grow in value or generate an investment return.  However, if a coin investor or collector is methodical and patient in their approach to collecting, it can be very financially rewarding over an intermediate or long period of time.

WHAT IS COIN COLLECTING?

Coin collecting and the study of money is called numismatics. Coins often reflect the social, artistic, economical, and political trends of the time period in which they are designed and made. Numismatics looks at coins from an economic, historical, political, artistic, cultural and metrological point of view in order to place both intrinsic and monetary value on a coin.     

Throughout the centuries, different cultures have preferred coins over paper money and some have used both. By their very nature, coins are highly durable, convenient, mobile, and accurate modes of payment and investments.

COMMEMORATIVE COINS: METAL COMPOSITION AND LEGAL TENDER

Commemorative coins are struck from both precious metals as well as base metals.  They commemorate or acknowledge, celebrate and record a multitude of subjects and themes.  These coins’ Precious metal compositions include platinum, gold, silver, and their alloys, with occasional use of exotic metals such as tantalum.  Non-precious metals such as copper, nickel and zinc are used to strike base metal coins.  Coin Mercantile at this time offers only coins struck from precious metals or alloys thereof.  To be legal tender, all commemorative coins must be accepted as a medium of exchange in the country in which or for which it is minted and possess the following additional and essential properties:

• The precious metal or base metal structural composition of every commemorative coin must be accurate.
• Commemorative coins must be precisely weighed and their monetary value guaranteed by the country’s National Bank or Issuing Authority (usually the ruling monarchy or government).
• The commemorative issue must be limited by either set production quantity or time (strike-to-order or calendar cessation of production). The smaller the worldwide mintage, the rarer the coin, and in consequence the greater the potential to increase in value.
  

COLLECTIBLE COINS AS AN ASSET CLASS

Treasured as a store of value for thousands of years, precious metal coins are an important and secure asset.  Paper currencies may come and go, but gold and other precious metals endure.  They have maintained long term value for thousands of years, and are not directly affected by the economic policies of individual countries and don't depend on a "promise to pay."  Collector Coins have demonstrated extremely favorable characteristics as an investable asset class, including relatively low volatility and stable, consistent returns over extended periods. In fact, the long-term average returns have exceeded many, more widely used asset classes, such as stocks, bonds, real estate, and commodities.

ASSET CLASS CHARACTERISTICS

• Precious metal numismatic coins are a hard asset that historically have shown to often be insulated from declining values of paper currencies (e.g. the deterioration of the U.S. Dollar)
• Numismatic coins have historically been an excellent store of value and hedge against inflation
• Numismatics tend to have much less volatility in their prices than bullion (high circulation) coins which in contrast have almost a one-to-one relationship (1.0 correlation coefficient) with the movement of underlying spot precious metal prices.  Numismatics have historically shown to have much greater price stability compared to bullion coins during both increasing and decreasing precious metals markets
• If structured properly (a disciplined and methodical approach meeting appropriate quantitative and qualitative criteria) numismatic coins can be an excellent asset class in which to diversify one’s portfolio

HISTORICAL PERFORMANCE OF THE CU 3000 NUMISMATIC COIN INDEX

Coins are timeless in the sense they have been used and accepted as legal tender for the thousands of years.  Coins can be valuable objects and depending upon one’s coin selection are often considered a solid investment in the future as well as a practical investment in history. Do Not assume that every coin will increase in value, or hold its value, or that one coin is as good an investment as another. Achieving an Investment return for your coin portfolio depends upon your coin selections and the degree to which your coin portfolio meets quantitative and qualitative criteria which have historically been and at the time of sale, continue to be indicative of monetary value creation and increase over time.  Always Remember:  There are no guarantees that your coin portfolio will increase in value or provide you with an acceptable rate of return over time.  However, statistics and coin indices such as the CU 3000 Coin Index have demonstrated that a well diversified coin portfolio can produce compelling investment returns over time.  According to the CU 3000 Index (a standard for measuring numismatic coin performance):

1. Since 1970, the average annual return was 10.9%, compared to 6.9% for the Dow 30 stock
2. From 1981 to 1989, the index gained a total of 660%, well above other, larger asset classes
3. Of the 15 recessions since 1919, numismatic rare coins have performed well compared to other investments

REMEMBER: Past Performance is No Guarantee of future results

QUANTITATIVE AND QUALITATIVE FACTORS DETERMINING  A COIN OR COIN COLLECTIONS’ VALUE

The below factors are Not all inclusive but will provide you with a representative sample to consider as you build your coin collection:

• Mintage
• Uniqueness
• Method of Strike: proof, proof-like, specimen quality or brilliant uncirculated
• Material (gold, silver, platinum, palladium, tantalum, rhodium)
• Structure (.9999 pure metal, alloy, clad,)
• Historical Cultural, Political, Artistic or Other Significance
  
• Condition and appearance
  
• Supply and demand
• Image and Design quality
• Grading (mainly for American coins)
  

IT IS OUR PLEASURE TO PROVIDE YOU WITH AS MUCH INFORMATION AS POSSIBLE

At Coin Mercantile, we believe our customers are our most valuable asset.  We are here to serve you.  Our service includes providing you with as much knowledge and education about modern world coins as you would like to know.  Feel free to contact us about any coins we are offering or any coins you are seeking to purchase.  We will gladly assist you to the best of our ability and share with you our thoughts about each coin and collection.  This includes our experience concerning:  those coins that are popular; which coins sell well or have not; which coins tend to grow in popularity during certain times; and even provide you with our experience and knowledge of pricing history of coins with which we are familiar.  Again, please remember, past performance of a coin or coin collection’s value is No Guarantee of future results.  We look forward to serving you!