Rare Coins Outperform Stocks and Gold Over 25 years January 28, 2009
In a tumultuous year for financial markets, it is noteworthy that rare coins outperformed all other assets considered, including gold, by a significant margin.”
From “The Investment Performance of Rare U.S. Coins”
By: Raymond E. Lombra, Ph.D.
Rare coins have outperformed the stock markets and gold during a year of severe economic turmoil. Investment studies have shown that rare coins of true quality and rarity, properly priced and selected, can be excellent long-term investments. Although past performance is no guarantee of future results, investment in rare coins has historically offered the opportunity for both substantial capital appreciation and asset protection during inflationary cycles and periods of economic disruption.
As the economy moves through its regular cycle – from recession to recovery to stable growth and, eventually, to inflation – it produces windfall profit opportunities for alternative assets like rare coins. For example, some years ago, the Chairman and Chief Executive Officer of Fidelity Investments was one of the principal investors in a partnership that invested $348,380 in rare U.S. coins. The partnership was liquidated approximately 4 years later for $2,158,450.
But rare coins offer more than the occasional windfall profit. A study by the Chief Investment Officer for GE Private Asset Management, Inc. concluded that rare coin returns have been highly attractive over the last sixty-two years, and that even a small allocation provides a good diversification for a well-diversified portfolio.