Rare Coins - The New Value Investment?

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It’s a multi-billion dollar industry known more for pinky-ringed mavericks than Wall Street suits. But that may be about to change with the discovery of price anomalies in the rare U.S. coin market.

Numismatic Investments Corporation announced it has commenced commercializing its discovery of significant price inefficiencies in rare US coin market by offering K-Score Portfolios™ of prospectively undervalued coins for sale to accredited investors.

“After an extensive research effort we identified a considerable number of investment grade coins that are prospectively undervalued,” noted Gary Knaus, Numismatic Investment Corporation’s president and CEO.

Prices for coins identified by Numismatic Investments as undervalued have increased 13.40 percent over the past eight months, where as the PCGS3000™ (the widely followed rare coin index) rose only 5.28 percent. “This finding highlights the potential for above market returns to investors seeking the benefits provided by rare US coins in a well-diversified investment portfolio,” said Knaus.

Among the documented benefits of including rare coins in an investment portfolio are increased returns and reduced volatility. Rare coin returns are also negatively correlated with interest rate sensitive investments, and inversely related to equity returns on a 10-year moving average basis.

Numismatic Investments recently discovered a “trough-like” relationship between the CPI and rare coin returns. During periods of high inflation, as well as periods of deflation and low inflation, rare coin returns were exceptionally strong.

So just what makes numismatics an area worthy of financial analytics? “This market is attractive for several reasons, not the least of which is that rare coin prices are 63 percent below their 1989 watermark high,” remarked Knaus.

Factors driving interest include a history of growth, excellent returns, high liquidity, independent coin certification services, opportunities for 1031 tax-deferred exchanges, and an estimated $40 billion of rare U.S. coins held by four to seven million collector/investors.

Rare coin portfolios offered by Numismatic Investments are not for everyone - literally. As a rule of thumb, tangible assets should not exceed five to ten percent of investable assets. Given a recommended minimum portfolio size of $50,000 and a suggested five or more year holding period, this would limit customers to accredited investors or those who are nearly so.

Since fewer than 10% of certified rare US coins qualify for inclusion in a K-Score Portfolio™, only a limited number of portfolios can be filled each year.

Portfolios are not offered for sale directly to the general public. “We prefer to work with and through financial professionals to ensure that potential clients are properly qualified,” noted Knaus. Financial professionals wishing to learn more can contact Numismatic Investments at 630-963-6350.

About Numismatic Investments Corporation:

Numismatic Investments Corporation performs extensive and ongoing mathematical modeling of US coin series to identify prospectively undervalued rare US coins. The firm sells portfolios of US rare coins - K-Score Portfolios™ - based on predicted performance relative to the coin market. Each portfolio is unique and tailored to individual client investment preferences and choices. The firm does not carry an inventory. Coins are acquired on an order-by-order basis. For more information please visit: http://www.coinportfolios.com.


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