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Rare Coins vs. Dow Jones Industrial Index: Performance Comparison

How have Rare Coins performed in the past versus the Dow Jones Industrial Index?

As an asset class, rare coins have outperformed conventional assets such as stocks and bonds. A broad rare-coin index, the PCGS3000, is up 23.6 percent in the past 10 years. By comparison, the Dow Jones Industrial Index was at 11,723 at the beginning of January 2000 and, as the graph below shows, it is at 10,779 at the time this is being drafted (03-19-2010). So, if you had been a "long-term" investor in the stock market, your investment is actually lower today than it was 10 years ago. How's that for return on your investment?

Now, it's important to go a bit into more details about two very important points that are critical for individual and institutional organizations considering purchasing rare coins:

  • Understand your time frame
  • Work with a reputable dealer

Know your time frame:

As we have pointed out in previous issues of The Gold Monitor, the "population," as it is called, of any particular rare coin issue is essentially static. The population of people however grows. More people create the potential for more coin buyers and collectors. Ultimately, more buyers and collectors competing for the same limited number of coins leads to the steady increases in values we've described.

As with stocks, bonds, real estate and other investment classes, while the long-term direction of the rare coin market is up, there are peaks and valleys along the way. If you are an individual investor planning on retiring in 20 or more years, or you are building a legacy for your children or grandchildren - and you can rely on other assets to take care of any needs for cash that might arise - you are ideally positioned to benefit from the long-term tendency of rare coins to increase in value.

A good strategy for you would be to buy and hold. You could purchase all the coins you intend to own now, or plan to invest a given amount each year. With a perspective of two, three or more decades, the direction and level of the current market would be of little concern to you. Nor would it be critically important to select "hot" coins that are likely to appreciate the most within the next year or two. No one knows what the hot coin issues will be several decades out, so you would be well served to assemble a broad range of quality rare coins.

Review the 10 year PCGS3000 chart below. If you had bought your coins in 2000, you'd be 10 years into your hold period, and be very pleased with the increase in value of your coins today. Conversely, if you'd invested in the stock market, your investment wouldn't have gained a penny - in fact, you would have lost money.

Work with a Reputable Dealer:

With certified coins, as with other asset classes, you should know your goal and your time frame. And a reputable dealer should assist you with your specific goals. How do you know if you are dealing with a "reputable dealer"? Well, one way to tell immediately whether or not the dealer is concerned with your goals is whether or not they ask you questions, before they "tell" you what you need to know.

At the United States Gold Bureau, our experts have combined decades of experience in the industry, and we're in this business for the long-term. So you when you call us, you should expect that you will be treated well and your specific goals will be listened to carefully. Tell us what you're trying to accomplish in the certified coin market, and we'll help you get there.

Dow Jones Industrial Index - January 2000 to March 2010

PCGS3000 - January 2000 to March 2010

USGB Recommendations:

Diversify your portfolio with Platinum. And, as always, do it with the best quality, most rare type available - W Proof 70 coins.

2002 Platinum American Eagle W Proof 70 Coin Set

There are 3 things that make a rare coin valuable

  1. History
  2. Condition
  3. Supply

About the coins:

The 2002 Platinum Eagle Proofs are the last installment in the five year "Vistas of Liberty" series. They also mark the third appearance for U.S. mint sculptor Al Maletsky as the reverse's designer on a "Vistas of Liberty" coin. Maletsky's kinetically dynamic design, "Eagle Fishing in America's Northwest," features a predatory swooping Bald Eagle pursuing a leaping trout in a pristine lake panoramically rimmed by majestic snow-capped mountains.

Al Maletsky's return to close out the "Vistas of Liberty" series resulted in arguably the most compelling reverse for the entire "Vistas of Liberty" series, even topping his primordial image for the "Wetlands" issue in 1999. "Eagle Fishing in America's Northwest" is the first reverse design to depict the Bald Eagle doing something other than flying over the landscape. This time, he is predatorily engaged with his natural environment rather than being an aloof spectator. United States coin history is richer for this rare and unique distinction.

Following the trend he began in 1999, Maletsky's "UNITED STATES OF AMERICA" legend dramatically caps the coin's design with a single line of text arced at the top rim. However, this time the legend's span is significantly wider than any other coin in the series contributing to the dramatic impact of the image. The legends for fineness ".9995 Platinum" and government guaranteed platinum weight are once again below the coin's legal tender denomination, but this time they arc around the bottom rim. The West Point "W" mint mark is placed within the sunlit portion of the lake near the left rim just above the Eagle's tail.

Original Total Mintage Summary:

Maletsky's return sparked collector demand, and for the first time since the Platinum Proof series began, the total mintage of 40,253 actually increased over the previous year's mintage. The total places the 2002 Platinum Eagle Proofs dead in the middle as the fifth rarest coin in the series from 1997-2005. The $50 Proof coin continues its reign as the rarest within the issue with only 8,772 coins produced.

NGC Certified Population Summary:

Through June 26, 2009, a total of only 248 four coin Platinum Eagle Proof sets from 2002 had been certified by NGC in Proof 70 condition.

Act now to secure your Proof Platinum Set!

Past Recommendation Update:

2008 Proof 70 Gold $50 Buffalo

The US Mint began producing the Gold American Buffalos in 2006. This was the first 24 karat gold coin ever produced in the United States. In 2006 they minted 300,000 coins, but in 2008 the mint only produced the coin proof for two months, creating low mintage figures and an even lower supply of Proof 70 coins.

When the 2008 Proof 70 $50 piece was released, they traded for around $2,150. A little over two years later, if you can get your hands on one, they now trade for over $6,355.

We expect 2009 Proof 70 $50 Gold American Buffalo to do the same due to similar mintage figures. Ask one of our Numismatic Specialists about the 2009 issue, today! With over two decades of combined knowledge and expertise in the modern, rare coin and metals markets - now is the time for you to benefit from our insight.

Sincerely,

United States Gold Bureau 1-800-775-3504 www.usgoldbureau.com © 2010 USGB LLC

Newsletter Special:

2010 Mint State 70 Silver American Eagle

Available in packs of 10 at $125.00 per coin. Give us a call at 1-800-775-3504 and we'll help you get these coins into your collection.

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