Alternative Investments : the Numismatics !
In times of turmoil , “Safe haven” assets are very asked by investors, Gold is the best
example. However, How to invest in Gold: with ‘’gold-paper’’ or Bullion ? But there is a
third option linked History : the Numismatics ! Derived from latin world numisma, the
Numastics is the study of the Money coins which have legal tender or which have had
legal tender. Also included are medal-type commerative coins. Note that the term Money
is derived from the Latin verb monere meaning to warn because the coin warn on the
value of the transaction.
As we know, old money coins are composed by metals like Gold but also Silver and
Copper, representing a wonderful tool to date historical findings. In addition, Collectors
around the world are interested in Numimatics for various reasons : historical or cultural
interests, artistic interest etc … Despite its first interest, Numismatics like Wines and Art
represents an alternative investment assets. Contrary to Gold standards investments in
Bullions or via specialized assets products, investing in Coins appears more and more are
“profitable” for whom a little be interested in History and wanted a safe haven asset.
However, like all alternative investment, experiences and knowledges of the
characteristics useful to evaluate the items are very important to properly gauge the
Coins evaluations: the Numismatics value vs the Safe Haven value !
Evaluate the price or the value of a coin is a complex task distinguishing two kinds of
values: The Numismatics and the Safe haven values !
The Numismatics value could be designated as the ‘’ Collection’s value” related to the
scarcity of the coin whatever its facial value or the value of its metal. In this case, the value
of the coin is time-varying and are dominated by a very specialized and experienced
agents representing the Demand-side of the market. Consequently, the market of coin is
poorly liquid and find the right collectors to sell the right coin is a lasting task as many
parameters affect the value of a coin:the Year of issuance, the Country or region, the
historical period (Greco-Roman, Mesopotamian, Middle-Age, etc …), the composition (one
metal or combination), the type of count system (10 or 12 ), the language and inscription
related to an important historical personage, the quality, (its abrasion, its natural aging,
shocks, or asperities etc …) …. Are example of criteria useful to asses the value of a coin.
However, a system of notation help collector and investor to globally graduate coin in
order to compare themselves. The most expensive coin sell in auction at 10 Million $ is a
silver coin Flowing Hair Dollar of 1795 considered as the First Dollar of the USA.
This simple aspect overcome all others features that possibebly negatively
affect it value like it silver composition , the coarse quality of its marking … but
it historical value is its most advantage.
The Safe Haven value is the value of a coin only based on the value of its metal. Then, this
type of value only focusing on the “price by weight” of the quantity of metal composing it
(Gold and Silver coins are very asked for this reason). In this case, investors invest in coins
as counter-cyclical asset during crisis time (high inflation, deflation, etc …). The safe haven
value is then related to current prices of Gold and Silver. In addition, fiscal characteristics
tend to support the coins market.