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| Passion Investments: Coins |
Heads or Tales
Catherine Curan
10/01/2005
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“The Internet
has attracted a very broad base of people,” says Silvano DiGenova, chief
executive of coin dealer Superior Galleries in Beverly Hills, Calif. He adds
that with 140 million collectors, the U.S. Mint’s state quarters program is also
sparking more serious interest. “There is broad-based demand that is funneling
its way up to the top.”
Until the late 1980s, collectors lacked a successful,
industry-wide benchmark for rarity. But now U.S. coins are assigned a grade
| “THERE’s sentimental value, worth and history. It makes all those things connect.” | between 1 and 70 (60 and above is considered uncirculated) and are encased in
tamper-resistant plastic to guarantee the rating. Lustig recommends that
newcomers buy only graded coins and work with dealers who are members of either
the Professional Numismatists Guild or International Association of Professional
Numismatists. International coins are not graded, so collectors may handle them
directly; but they do require more extensive research to determine their value.
Even with the advent of Web auctions and consistent grading policies, no
collector makes a quick leap from novice to successful numismatic investor. To
increase the chances of succeeding in this increasingly competitive market,
investors are advised to treat coins much like any investment play: Learn as
much as possible about the coin in question, regardless of its grade. Likewise,
while it is tempting to dream of making a killing on an undervalued specimen,
the rare coin market sees rallies and retreats, like any other asset class. The
CU 3,000 has gained momentum during the last few years and now tops 64,500, but
is still off 65 percent from its May 1989 peak of 181,089.
West Coast physician and collector Gene Sherman knows that
what seems like a valuable coin one day can look more like a well-worn drachma
after a market collapse. He has had a passion for coins since he was an
8-year-old filling in the slots in his Lincoln penny book; he now collects early
U.S. pennies. Sherman currently owns two of his favorite designs, but sold the
third in a panic during a down market. “As a collector I have watched coins’
value go down,” says Sherman, who is seeking a replacement Liberty Cap cent.
“You have got to have a strong will to find the right one and hold on to it if
ever the coin market does poorly.”
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