Rare coins stable in 2012

By Steve Roach | 01-07-13
Article first published in January-2013, Market Updates section of Coin World

Coin World provides the Wall Street Journal with a “Classic U.S. Rarities Key-Date Investment Index” for use in its annual investment scoreboard.

The 2012 scoreboard was published in Journal’s Jan. 2 year-end review of markets and finance.

In 2012, Coin World’s rare coin index registered a very modest 0.5 percent loss overall, compared with a 4.98 percent gain in 2011, a 10.3 percent gain in 2010, a 7.9 percent loss in 2009, and gains of 15.8 percent, 31.9 percent and 8.8 percent in 2006, 2007 and 2008, respectively.

This year, collectible coins represented the lowest performing investment on the board, showing the only loss of the eight broad categories surveyed.

For comparison, money market funds yielded 0.03 percent, residential real estate gained 4.04 percent and the Dow Jones Industrial Average showed a 10.24 percent gain.

Gold increased just 0.06 percent during 2012, compared with increases of 7.13 percent and 8.68 percent for silver and platinum, respectively in 2012.

Coin World’s index features 82 rare, high-grade coins: 15 copper coins, five copper-nickel pieces, 39 silver coins and 23 gold coins. In 2012 the 82 coins in the basket had a total value of $13,629,825; their value represented a substantial leap over the portfolio’s initial 2005 value of $7,722,435.

The relative position of rare coins on the scoreboard has changed each year. In 2008, rare coins were among the few investments that registered a gain on the scoreboard, while in 2009 rare coins as measured by the index were among the scoreboard’s worst-performing investments as the housing and investment markets rebounded.

In 2011 coins were in the middle of the scorecard.

For rare coins in 2012, the copper segment posted a 1.82 percent gain and silver coins showed a 0.1 percent gain, while rare gold coins showed a loss of 1.1 percent.

Part of the reason for the near steady holding pattern of rare coins in 2012 as measured by the index has been the varying swings in price between coins grading the same but having different levels of quality in the grade. While prices for exceptional coins have been soaring, those of the same grade but with less attractive characteristics have been lagging, providing wide variances for seemingly similar coins. ■