Because of their size, rare coins also give owners the ability to transport large amounts of wealth with ease anywhere in the world. Rare coins are also duty free both in and out of the U.S. and exempt from Foreign Account Tax Compliance Act (FATCA) reporting.
Who Is Qualified To Invest?
The most important consideration in determining whether a U.S. rare coin strategy is right for a client is, as with many other investments, the client’s investment goals. Clients looking for long-term wealth preservation, multigenerational wealth transfer and capital appreciation solutions are ideal candidates. For example, clients with short-term liquidity needs or concerns are not a fit. Nor are clients requiring a coupon or cash flow. To optimize this investment strategy, investors need to have sufficient holding power. U.S. rare coins should be worthy of consideration for clients looking for low-maintenance investments characterized by low risk, low volatility and non-correlation.
Enhanced Transparency And Liquidity
Expert certification of U.S. rare coins is easy to access, affordable and comes with a guarantee of authenticity. In addition to rarity, one of the fundamental factors in determining the value of rare coins is the physical condition or grade of the coin. Professional Coin Grading Service and Numismatic Guaranty Corporation are two grading firms that offer guarantees of both grade and authenticity. This is a sharp contrast to the art market, where concerns about authenticity and forgery, are on the rise. Moreover, there is a network of thousands of rare coin dealers willing to provide bids on coins. Price guides are plentiful and published independently. Online and physical auctions are common. This has all contributed to a more evolved, liquid and transparent U.S. rare coin market.
Storage And Insurance
Unlike Gold ETFs and more traditional securities, many U.S. rare coin investment strategies require that investors take physical possession of hard, tangible, assets—the rare coins themselves. However, investors can avoid the safekeeping costs and logistical challenges traditionally associated with purchasing rare coins. As a service to clients, a rare coin asset manager may offer storage and insurance at no charge as part of the ongoing commitment to the client relationship.
Choosing An Asset Management Firm
Arguably the most important decision an investor can make before embarking on U.S. rare coin investing is choosing the right rare coin advisory firm and asset manager. Basic requisites for a firm are its high-end U.S. rare coin market knowledge, experience, access to current information and relationships with key market participants. There are also intangible factors that contribute to differentiating the best from the rest. Given the long-term nature of the asset and investment profile, investors should seek a rare coin firm having a long-term relationship orientation and a strong human component.
Structuring and funding a client’s portfolio is the beginning of the relationship, as a rare coin asset manager will serve as a family’s trusted advisor in the U.S. coin market. This ongoing relationship dynamic enables investors to retain complete control of their portfolio of assets, while their advisor brings them profitable selling opportunities as they present themselves in the marketplace. When heirs inherit a rare coin portfolio, they will not be alone in attempting to understand and value their assets. A good rare coin asset manager will advise heirs of their options and work with them to ensure that their decisions are executed to their satisfaction.
Conclusion
An alternative investment strategy that includes U.S. rare coins provides investors with a cautious, conservative, non-correlated, strategic diversification option for their portfolios, especially significant for those investors challenged with sourcing effective wealth preservation solutions. The U.S. rare coin market has evolved, providing today’s investors with enhanced transparency, liquidity and guarantees of authenticity. Moreover, as an uncorrelated wealth preservation tool, U.S. rare coins can mitigate risk from severe wealth-destroying market events.
Michael Contursi is president of RCW Financial, a U.S. rare coin asset management firm in Irvine, Calif. He can be reached at [email protected] or 949-679-1222, ext 217.