MARKET OVERVIEW

The rare coin market is poised for significant price gains. In fact, those price gains have already begun. The reasons why today is one of the very best times to buy rare coins are:

Prices are near the bottom.

After major bull markets in 1970-1974, 1976-1980, and 1983-1989, rare coins went though a significant bear market between 1990 and 1994. The past 40 months have seen a turnaround with prices starting to move upward for virtually every coin series. Although prices have advanced between 10% and 20% (depending on the specific coin) during the past year, prices are still very reasonable compared to the last market peak. The rare coin market moves in definite cycles and every four or five years you get a chance to buy coins close to the bottom of the cycle Shrewd investors have that chance today.

Gold Bullion is very oversold.

The price of gold bullion is just one of the influences on rare coin prices. We have seen gold reach lows not seen since 1985 of around $260 per ounce, pushed down by global short-sellers who, as in the currency markets, have the financial means to literally control a market for a period of time; in fact, the outstanding short positions in gold bullion currently are at an all-time record of well over 2,000 tons, which equals twice the gold reserves of the Republic of China. This commodity market is being set up for a classic "short squeeze" of historic proportions as well-heeled traders scramble to buy gold to cover these already immensely profitable trades. If gold bullion can break $315 and stay there for a few months, then rare coin prices should go up 10% to 20% on this factor alone. (NOTE: Rare U.S. gold coins have actually appreciated as gold bullion plunged in late 1997, showing the renewed increase in demand for an asset with true rarity value!)

The stock market could be topping out.

Stocks have enjoyed the longest bull market in history spanning over 15 years with a TEN times increase in price (or a mere 1000% gain!). Some investors are starting to become more than a little nervous about the value of their stock holdings. A significant amount of the "smart money" is exiting the stock market and looking for investment alternatives. The rare coin market is starting to receive some of this money as dealer bids are moving to higher levels. It only takes a little increase in demand in such a fixed and relatively limited-supply market such as rare coins to move prices upward.

Supplies of top quality rare coins are paper-thin.

Within the bottom of every coin market, supply is very thin. Actually, the time when rare coin supplies are at the thinnest is in the 12 to 14 month period following a major bottom period. That’s exactly the scenario we have at this moment. Supplies are so thin that the slightest increase in rare coin demand creates immediate upward pressure on prices. Would you rather be buying into a limited-supply market today that is selling at 70% discount to its all-time high or one which is bulging with new supply and up over 125% during the last 3.5 years alone?! With all the new stock issues and high valued stocks with no reported earnings, the bubble could burst at any moment! Protect you paper assets with a hedge against inflation, U.S. rare coins.

TO FIND OUT MORE ABOUT HOW YOU MIGHT PROFIT IN THE COMING MONTHS. CALL A RARE COIN ADVISOR AT 1-800-992-9881.

GENERERIZED COLLECTING SUGGESSTIONS

Other collectors prefer not to specialize. They choose to collect in a more generalized fashion. A sensible generalized collection of United States gold coins should still have a set of parameters. As an example, a collector might decide to collect low population coins in a certain price range.

Or, he might seek only those coins which are the highest graded or which are in the Condition Census (i.e., are among the five highest graded). Sophisticated generalized collectors keep as many options open as possible.

If they are offered a coin which they feel is a very good value, they will buy it; even if it is not a perfect "fit" with the other coins they own. A collection of this sort makes sense as it allows a collector to cover all bases, which may prove to be very beneficial when he goes to sell his coins. There are a few safeguards which we recommend to make certain that you don’t get caught purchasing "hoard dates."

First and foremost, you should subscribe to both the PCGS and NGC Population Reports and you should study them. These reports will tell you exactly how many new coins have been graded each month and it will become clear which new issues have entered the market. Secondly, you should avoid purchasing most dates struck after the late 1870's/early 1880's. There are some exceptions to this warning but be forewarned that many once rare dates from his era are becoming far more available.

Finally, you should purchase coins which are scarce to rare in all grades; not just in the higher Mint State levels. Most rare gold experts strongly believe that a coin such as a nice AU50 1847 D half eagle (an issue which is scarce in all grades and which has solid collector support) is a far more desirable coin that a MS62 1884 S eagle (a coin which is quite common in the lowest Mint State grades and which has essentially no collector support).

Ultimately, we feel that this hoard will have a positive effect on the coin market. It is probable that large mass marketers will begin to sell these coins and this is certain to attract new blood into the market. In the meantime, we suggest that you learn as much about rare gold coins as possible that you can maximize your future profits as a result of this and other hoards.

We have many new exciting coins in our inventory, browse and see what may be of interest.

If you would like an up to date inventory, call 1-800-992-9881.

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