Semi-Numismatic Coins: Hedging Your Diversified Metals Portfolio with Gold and Silver Collectible Coins
Semi-numismatics are a part of coin collecting and investing that can be confusing to talk about at first,
but those with the knowledge to take advantage of semi-numismatic coins can find themselves with an edge over others that aren’t as aware – and this advantage can turn into major profits in the long term.
The definition of a semi-numismatic coin is a coin that is produced in a limited mintage and that factors both the spot price of the metals and the collectability of the coin into the price of the premium. In other words, semi-numismatics aren’t simply bought because of their rarity nor are they bought just because of their metal content, but a mixture of both. In a diversified portfolio, these coins act as a hedge against downward spikes in the metal market because of their collector value while also serving as an excellent way to profit and advance a portfolio as they’ll move up as the metals do.
So what does that mean for the average collector and investor? In the short term, it means that you’ll pay a slight premium over the spot price of the gold or silver to pick up one of these coins – usually not more than about 10%, although in certain cases, it may be more. In the long term, however, these coins will appreciate both with and without the collector’s market due to their collectability and limited mintages, unlike bulk bullion coins. Once these coins are produced, they’re never produced again, which means that people who are collecting sets of them are in a seller’s market.
More importantly, it means that by paying only a small premium over the spot price of the metal, there’s a potential for substantial growth. While gold in the 20 year period between 1986 and 2006 was relatively Bearish (until 2000 when it started a Bull run), coins that were classified to be semi-numismatic held their value through the Bear period and exploded in value once gold started an upward run. Because gold and silver have been subject to shortages due to demand, the demand on semi-numismatics has been even stronger as people are willing to pay the increased premiums to get their hands on gold and silver. This, in turn, pushes the price (and therefore, the profit margin) on semi-numismatic coins even higher.
Historically, this has worked out extremely well for collectors and investors of these coins; those who bought when the premiums were low and close to the price of the metal found themselves in a position to profit handsomely when the metal jumped in price – and when the metals went Bearish, they still found themselves in a position to profit because they could appeal to a different market segment that wasn’t as affected by market volatility. Semi-numismatic coins are an incredible opportunity to hedge a diversified portfolio against economic conditions while still giving the portfolio a chance to make lasting gains.
For more information on semi-numismatic coins and how they can help you to diversify your precious metals portfolio, call Global Monetary Reserve at 877.795.9585 and ask to speak with a personal account representative.