For those mindful of their wealth, gold coins are a means of diversifying away from paper-based assets, such as stocks and mutual funds. Certified coins, in particular, are ideal for those in search of long-term profit potential. If you're new to buying certified coins, review these six simple tips to get started safeguarding your wealth with official legal tender coins.
Tip #1: Make sure the coin has been graded & independently certified by a third-party organization
Certified coins are different from bullion coins in many ways, but one important way they differ is in how they're evaluated and graded based on their rarity and state of preservation. The price of a bullion coin is, in large part, tied to the spot price of gold, while the price of a certified coin is also based on its numismatic value.
When graded, a certified coin's rarity and condition are evaluated by a third-party grading service like Professional Coin Grading Service (PCGS), The Numismatic Guaranty Corporation (NGC), or Amos Numismatic Authentication and Certification Service (ANACS). To ensure the authenticity of a certified coin, which is an important factor with regard to its long-term profit potential, call the grading company and give them the registration number on the coin's plastic slab. Or, visit the grading company's website and enter the registration number online. PCGS, NGC, and ANACS all offer online certification verification.
Tip #2: Work towards owning all of the years & denominations of issue for a coin program
The fewer coins in a grade, the more likely a coin in that grade will be highly sought after in the marketplace. A coin's “population” is the number of coins within a specific grade, and owning a coin with a relatively small population can be ideal for appreciation. Since achieving a perfect strike and maintaining a coin's pristine condition is difficult, many higher-grade certified coins are difficult to get ahold of and their purchase price reflects it. The basic rules of supply and demand apply here: when demand is high and supply is limited, the purchase price tends to increase.
Some gold owners believe that the best way to own certified coins is to own all of the years and denominations of issue for a coin program, also known as the date run, and all in the highest grade possible. This type of diversification within your gold portfolio can maximize the potential for appreciation.
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Tip #3: Further diversify with gold and silver certified coins
Established wealth holders know that diversification is the key to a balanced portfolio. A diversified portfolio, or one that “puts its ‘eggs' in many ‘baskets' — is better positioned to weather large month-over-month market gyrations and provide a more stable set of returns over time,” according to the Charles Schwab Expertise Team in Forbes. Taking steps to diversify your gold portfolio with gold certified coins is wise, but diversifying with an additional metal could provide even further insulation.
Both gold and silver certified coins have numismatic value, but they also have intrinsic melt value. Diversifying with silver provides an additional layer of security, since “[s]ilver is so different than gold. It has more industrial applications, so it's driven more by industrial demand,” says Philip Diehl, President of U.S. Money Reserve and former Director of the U.S. Mint. The price of gold, on the other hand, tends to be impacted by a host of other factors including the value of the dollar, interest rates, economic and political turmoil, central banks, and the risks/costs associated with mine production.
Tip #4: Beware of counterfeit coins & obscure dealers
The American Numismatic Association's education director, Rod Gillis, recently told NBC News that counterfeit coins are “flooding the market at an astonishing rate” and compromising the assets of current coin holders. Incidents are so high, in fact, that the Professional Numismatists Guild released a statement in May 2016 emphasizing how imperative it is that “collectors, investors and the general public deal only with reputable, knowledgeable experts who offer a guarantee of authenticity.” Buying certified coins at a flea market or from an unknown seller could be risky, even more so now.
To avoid falling victim to a counterfeit operation, research your coin company's background. Are they rated by the Business Consumer Alliance? Are their coins fully back by the United States government for weight, content, and purity? If not, it could be time to trust a different gold company, like U.S. Money Reserve, with your certified coin purchase.
Tip #5: Care & store your certified coins appropriately
Taking steps to properly store your holding of certified coins will have little impact on their intrinsic melt value, but it could help preserve their numismatic value. Reputable third-party grading services place certified gold and silver coins in individual, sonically sealed, tamper evident protective holders.
These plastic holders protect the gold and silver coins from scratches, smudges, and other occurrences that could result in the coin's surface condition being marred. A blemished surface condition will preclude numeric grading from professional grading associations. So, while it may be appealing to bring out your coins during special occasions to share with family members and friends, you may want to do so sparingly, should a coin (even a coin that's sonically sealed) be dropped or tainted in any way.
Tip #6: Hold on for the long term
Due to their grading, rarity, and insulation from spot market volatility, certified gold and silver coins can better achieve their maximum potential when held for long periods of time. By nature, their scarce quantities allow for increased potential. “Being in a rush when buying or selling will lead to poor results,” says former President of the Professional Numismatists Guild, Jeff Garrett. In his opinion, “How long you are willing to hold your coins is a major element to being a successful” coin holder. For short-term growth, bullion coins, on the other hand, are a better choice.
“The time buy gold is now,” says Forbes contributor Henry To
“Gold remains a solid, long-term investment and the time to buy gold is now,” writes Forbes contributor Henry To, Chief Investment Officer for CB Capital Partners. “I anticipate a gold price of $2,000 an ounce by 2020,” he continues. If To's prediction proves correct, would you have the means to further diversify your portfolio with certified gold and silver coins? For live pricing on U.S. Money Reserve's complete inventory of certified coins, call 1-844-307-1589 today. Account Executives are standing by to answer any questions you may have concerning your purchase, whether it's your first certified coin order or your fifth!
