Numismatics: Precious Metal Investment With A Major Upside

We Americans must report every asset we hold overseas to the U.S. government… with two exceptions.

Two foreign assets remain non-reportable to the IRS and company—real estate titled in your personal name and precious metals held in an allocated manner.

“Allocated” precious metals could be gold bars on a shelf in a vault under the airport in Zurich… or they could be coins in a personal safe in your home in another country.

Gold bars are hard to move around easily and you need to find someone with enough cash to buy the entire bar to make the transaction as frictionless as possible.

Coins, on the other hand, are much more portable. Most gold aficionados favor one-ounce gold coins like Canadian Maple Leafs, American Liberties, or South African Kruggerands, among other options.

Those coins sell for small premiums over the spot gold rate and are extremely liquid.

Another option for precious metals and coins that I’ve been focused on lately is numismatic coins. These coins have bigger premiums over spot rates because they are collectible. They go up in value as the metal goes up in value, but they also can go up in value as collectors seek to complete their collections or a particular minting becomes more interesting to investors.

While these collectible coins can be less liquid than an American Liberty, for example, they also can have more value and therefore allow you to carry a coin worth multiples of the gold spot rate in your pocket.

Think of Mr. Wolff, Ben Affleck’s character in the movie “The Accountant.” Wolff stores his get-away wealth—cash, gold, coins, comic books, and baseball cards—in drawers in an RV. It’s all portable, but cash can take up a lot of space. Collectibles like baseball cards and comic books can make more sense in the context of weight and storage space versus value. On the other hand, these kinds of collectibles aren’t as liquid as gold and coins.

Numismatics offer a good compromise.

I’ve found a group out of the United States that I’ve been working with personally to build a collection. This group is able to source limited-edition coins upon release that other dealers don’t get. That’s made buying from them fun for me. It has become a hobby with upside potential.

I see buying numismatics as very different from buying gold. Gold isn’t an investment. It’s a store of wealth. These coins are an investment with built-in minimum values based on the value of the metal.

In some cases, they can be works of art, as well. Mints around the world are always trying to come up with new and interesting designs. Anniversaries are big opportunities for minting coins, as are inaugural events, and some of these limited-edition coins can see excellent appreciation within a few years of coming to market.

Of course, there’s no guarantee any collectible coin will grow in value, but you’ll always have the benefit of the metal value, whether it’s gold, silver, platinum, or, in some cases, a combination of all three.

I’ve only just started paying attention to this market. The guy I’m learning from, Keith Jacobsen, has decades of experience, and he has agreed to host a webinar to help my readers appreciate the advantages of this investment strategy… as well as share details of some of his most recent offerings.

Keith has even offered to send every webinar attendee a commemorative coin issued for the 400th anniversary of the voyage of the Mayflower. It’s a base metal coin, meaning it doesn’t contain any precious metal. It’s a collectible with a retail value of US$15.95. Still, only 10,000 were minted… and Keith was able to obtain a number of them.

Lief Simon