Monday, July 7, 2008

“Confident Collectors are Aggressively Buying”

This sounds loaded, but its the truth. After a brief dip in the spot price of gold, the rare coin surge higher continues. Fortunately for coin investors, no dip was experienced. Gold’s mood swings have seem to have nothing but a positive effect on the market. Those investing in rare coins that are patient and watch the economy around us falter; will be the winners in the investment arena. Investment guru Warren Buffet recently said inflation is “exploding.” “Whether it's steel or oil ... We see it everyplace.” In the history of the rare coin marker it seems that inflation is the number one force that prompts the increase of rare coin prices. There are still so many truly rare coins that are affordable and increasing in value. This will not continue forever as “confident collectors are aggressively buying rare and interesting coins”, said the CDN

Morgan Silver Dollars

If inflation continues over the next three years you can project the acceleration of investments in Morgan Silver Dollars to increase on average 122% per year.  Morgan Dollars performed outstanding between 1983 -1986, (stock market crash, recession, savings and loan scandal and inflation). Morgan Dollars have always been the most popular way of investing in silver in the rare coin market and will prove to be such during this run. 
Between inflation, increased demand and rising silver prices; expect Morgans to explode. Consider the fact that silver over the last three years has gone from $5.00 an oz. to over $18.00 per oz., that’s a 275% increase, while Common Date Morgans have only gone up 18%. We see this trend time and time again. Rare coins seem to wait until precious metals peak out and begin moving downward before they see “bull market” gains. Yet, rare coins increase at a steady 6% per year during prosperous metal markets. Again, if inflation continues; rare coins will significantly outperform their bullion counterpart.

Morgans During Inflation

Basic San Francisco Morgan Set MS-65 (1878-1882) during Inflation:

1983 1986
$1,320 $6,125 365% or 122% per year

A basic San Fransisco Set bought today, under with higher prices of silver should shatter these returns.