While the 2015 coin market features strength, there are areas for additional growth and opportunity in 2016 for every level of collector
By Douglas LePre – Senior Portfolio Manager at Blanchard and Company, Inc …….
This past year was an amazing year for numismatics that featured many high-end collections that came to market and brought huge interest and dollars with them, with the Pogue Collection being the foremost highlight of 2015. This phenomenal collection took 35 years to amass and contained only 650 coins but its pre-sale estimate was about $200 million.
The Pogue Collection contained some of the rarest numismatic treasures known, including the now famous 1822 $5 Gold Half Eagle that, when purchased in 1982, cost the Pogue family $687,500. It was the only piece of the three known examples in existence that was not in the Smithsonian’s private collection. Then there was the famous Proof 1804 silver dollar, a superb 1793 Chain Cent, a 1792 Half Disme and… the list goes on and on.
The first reason I mention the Pogue Collection is to illustrate what can happen when quality and patience are combined – and that’s the creation of a legacy that will exist long after the coins have been disbursed and sold to many different collectors and investors.
The second reason is to simply illustrate that there is currently a marketplace that is ready, willing and able to absorb these types of rarities while clamoring for more. Today’s coin market has a real appetite for quality, and the prices realized at the Pogue sale are proof of the market’s strength.
This year’s shows, while busy, weren’t overflowing with the kinds of bargains or rarity most collectors are searching for. It seemed as though many of the rarer coins were being held in place rather than finding themselves on the open market, which in the past has always signified that the market was about to see impressive growth.
I also believe that, due to an exceptionally volatile year for the metals markets, many of the people who possess rare coins feel far more secure maintaining their current holdings, and in all likelihood are not just standing pat but adding to their collections as the right pieces become available. While it has certainly been a good year for coins, I think we are in store for a more active market in the upcoming year.
Historically speaking, election years and the two years that follow have been beneficial to the rare coin market. So many changes take place during the first two years of a new administration that investors have a tendency to lean more toward the tangible side of the investment markets–especially with the volatility and counter-intuitive behavior seen in commonly stable environments.
At the time of this article’s composition, the Dow Jones Industrial Average year-to-date lost investors -1.43 percent, crude oil has declined more than 50 percent from its price in January and the national homeownership rate has dropped to its lowest level since 1993.
Any one of these facts would typically have investors running for a safe haven that wasn’t cash but, when you combine these facts with a new administration in the White House I think it helps to create the perfect storm for the rare coin market.
So where should collectors and investors concentrate their buying efforts in 2016?
I still stand by the ideal of quality over quantity. Always focus on purchasing the rarest coin you can afford at the time of purchase. But let me include a caveat to that statement because it can be easily misread. Regardless of your budget this rule applies whether you are investing $500 a month or $50,000 a month. Don’t shop out of your price range; rather, focus on purchasing the highest degree of rarity you can for your money.
There are plenty of good buys in the market, but collectors need to be diligent in doing research and making sure they have a trusted professional to help guide the way when possible.
In 2017, great segments of the market include early date type silver coins, such as Bust Dollars and Capped Bust Half Dollars, proof coins from any series dated prior to 1910 and all coins from the Carson City Mint.
I have found these areas to not only be profitable but consistently safe arenas for collectors’ investments. Most of the coins in these three series are rare, sought after and affordable.
When buying either early type silver or anything from the Carson City Mint, keep your eye out for AU-58 graded examples as there tends to be a nice selection of reasonably priced coins with quite a bit of eye appeal. I find them a better buy than MS-60 or MS-61 examples because the grading services have a tendency to be very careful as to what they grade as uncirculated, and as a result the high end pieces with only the faintest wear cost less, have better eye appeal and can offer more coin for less price. And there is a broader selection of them to choose from, so cherry picking a great looking piece is more attainable for many collectors.
With a new administration taking office in more than a year from now, 2016 is going to be the perfect time to take advantage of a market that is poised to move upward in 2017 and beyond. In my personal opinion 2016 will be the year of the opportunist. Happy hunting!
About Douglas LePre
Senior Portfolio Manager
Blanchard and Company, Inc.
Douglas LePre has been servicing clients of the numismatic community for thirty years and has a comprehensive understanding of the marketplace and its products. Having placed some of the scarcest coins in the market Douglas has established himself as someone who recognizes quality and makes every effort to ensure that his clientele get the highest class of rarity for their portfolio.