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Sunday, November 29, 2009

The Benefits of Collecting Key Date U.S. Coins


by D. L. Crane


What is a Key Date Coin?
A coin that is typically the last to be placed in a collection is a key date coin, because the date or date and mint mark combination is particularly hard to find or unusual. Key date coins are coins of solid investment potential. This is the coin that most collectors want to complete their coin collection.
The rarity of the coins is a low mintage, often the lowest of the respective series. In coin collecting, a key date refers to a date or date and mint mark combination of a given coin series or set that is harder to obtain than other dates in the series. The next level of difficult to obtain coins in series is often referred to as semi-key dates or simply semi-keys.
A key date coin is normally the rarest or the most difficult to find coin of a series to obtain. Key date coins frequently carry an additional air of mystery and allure, besides their rarity. One of the primary reasons for this is they are typically the final coins needed to complete a set. Key date and ultra rare coins have in the past, been excellent investments. A key date coin is generally considered to be the most important coin in a series, usually the lowest mintage and, or most expensive. Rarity is based purely on the number of particular coins that are presently in existence.
The number of coins initially minted is not nearly as important as the continued existence rate. The age and original mintage of a coin in reality have little effect on the present value of a coin.
Rare coins are not being produced any more. Once a coin was minted, the original die was destroyed at the end of the year, that way they will never be minted again. However, the rarity of a coin today is actually decided by the number of them existing in a specific condition. Although original mintage figures show the number of coins struck generations ago, these figures do not automatically indicate rarity. Professional Coin Grading Service (PCGS) and Numismatic Guaranty Corporation (NGC) the two major independent grading services, publish population reports that have shown that many issues considered rare for years are in fact relatively common.
Why a Key Date Coin?
These are the low mintage rare coins in the most popular coin series, and so they appreciate at a higher rate than other coins. This would an excellent list of great coins in which to invest. The answer is then, for a buyer to know the coins worth collecting for the purpose of completing their collection or for reselling someday at a higher price.
Collecting key date coins is where coin collecting gets serious for the coin collector. It is these key date coins that set the marketplace for coin prices and also a rare coin of a popular series is more likely to increase in price. For any collector of a certain series of coins, you must know the key date coins because these are going to be the most difficult coins to buy. Finding these rare coins can be a challenge, but worth it because collecting rare coins can mean big money profits.
Always remember that focusing on keys has been a great strategy because having coins that have clearly outperformed the rest of the market during the last several years will pay off. These key coins are beneficial to increasing the value of your coin collection.

Saturday, November 28, 2009

Morgan Silver Dollars The Perfect Investment Coins


A History Lesson For Making The Right Investment
by D. L. Crane



The record and history of many United States coins is very intriguing, and for that reason, coin collecting has become a increasing investment. Their past shows us a quick look into a part of US history, including economic facts and other major events taking place worldwide. Specifically one coin in particular, the Morgan Silver Dollar, named after its designer, George T. Morgan, has a rich and very fascinating historical meaning in its birth. Besides being uncommon, the Morgan Silver Dollar has historical importance, and an added value to the coin is its silver content. Because of this, the Morgan Silver Dollar coin is highly desirable among the coin investors today.

Morgan silver dollars are the perfect addition to any coin investment collection. Because of the silver content, these coins were at risk to melting for profit. Many of these coins still survive and have a high value to numismatists (The study or collection of money, coins, and often medals.)

Morgan silver dollars were minted between 1878 and 1903, then again in 1921. It is composed of 90% silver and 10% copper. Production was stopped in 1904, and hundreds of millions of Morgan Dollars were melted down for their 90% silver content because the price of silver went up. To provide war-time silver for Great Britain in 1918, over 270 million Morgan Dollars were melted down. Today's admiration of the Morgan Dollars show in its rarity thus investors and collectors have made the Morgan Dollar one of the most desired and valuable American coins in the world. There is the feeling of tradition and American history in holding a Morgan Dollar in your hand feeling and knowing what the silver coin carries in its weight and worth. The owner of Morgan Dollar knows the rarity of the coin's true value and worth. From 1904 to 1920, the mint ceased the Morgan silver dollar. Many of the older silver dollars were melted and replaced with the Peace design after one final run of the Morgan silver dollar in 1921.

Morgan Dollars are a little difficult to give average values for because many dates of Morgan Dollars were never circulated in large amounts. They were sold by the Treasury Department straight to coin collectors. Consequently, the Morgan Dollar values are given in two grades, "average circulated" and "basic uncirculated."

One hundred and sixteen years ago the San Francisco Mint struck 100,000 of the 1893-S Morgan Dollars so there are no more than 100,000 people with a 93-S Morgan. The 1893-S Morgan is the "KEY" Morgan Silver Dollar with the highest grades valued well into the high hundred thousands of dollars. The Record Morgan Silver Dollar sold for over One Million dollars.

The Morgan Silver Dollar Series carries a number of Key Dates as well as some Semi-Key Dates that all have significant values. See Price Guide

1883-S is both a common date and a key date coin in the Morgan Dollar series. These coins were widely circulated, and so most became heavily worn. Therefore, in heavily worn condition, these coins are common. However, since they were so widely circulated, the number of remaining coins that did not get circulated is very low -- making this a key date in the upper grades.

Now I am listing some samples of Morgan Silver Dollar values to show what you have the chance to invest in. And remember the values continue to increase.

A 1884-S Morgan dollar retails for - $17 if very worn, - $28 with moderate wear, - $250 if almost like new

The 1889 CC Morgan Dollar in circulated condition is valued from $475 in well worn condition to $9500 in almost uncirculated condition. Uncirculated coins have a value from about $30,000 in an MS62 grade to $450,000 in an MS67 grade. These higher grade coins are scarce. Additionally, exceptional coins such as those displaying a proof like appearance or a deep mirror proof like appearance have values that range from about $30,000 for an MS62 to $90,000 in an MS64 grade.

1893-S is the highest value circulation issue, at least in better grades - while a worn specimen retails for \"only\" a couple of thousand, mint-state coins retail in the $85K-$100K range. When the Norweb 1893-San Francisco Mint dollar was auctioned for $355,500 in Nov. 1988, collectors were stunned. Nobody then thought that a Morgan Dollar could be worth more than a quarter of a million dollars. Indeed, until the Norweb III auction, a Morgan Dollar had probably never before sold for as much as $150,000. Just imagine the value now with the current economic situation!

A 1895-S in very fine condition is worth: $450.00

Click here for a price guide on Morgan Dollar Values

The Morgan silver dollar is arguably the most popular coin in the history of the world. If investing in premier rare coins is the way you want to go, remember these are the classic coins that have literally made fortunes for some of the richest investors and collectors in America. The Morgan Silver Dollar coins are timeless beauties. They continue to hold their value and will for decades continue to be loaded with appreciation potential and should be part of any rare coin collection.

Wednesday, November 25, 2009

Collecting coins for fun and profit




by D. L. Crane


Coin collecting is something that is a hobby for some, but is looked as as an investment by others. There are many who start collecting coins for fun and profit, and as such can be a hobby that will not only provide hours of enjoyment, but can also help put money in their pockets as well.

The common denominator of all coin collectors seems to be the fact that the coins they are collecting do present some value. This can be a time-consuming hobby, however, and that is why you will find that many coin collectors specialize in a specific area of coins. You may find that one collector has a collection of limited edition coins, while another may specialize in Statehood Quarters. Gold and silver coins seem to be a popular choice among many coin collectors.

No matter what kind of coin collecting someone is interested in, it may behoove them to investigate online auctions and other internet coin related websites rather than begin collecting through a dealer. Buying through a dealer, whether collecting for fun or profit, may not be able to present them as good of a deal as can be found somewhere online. While these professional coin dealers have some great knowledge about the coins they are selling, they also are involved in the industry to make a profit above all else. By searching for bargains through online auctions you may be able to find coins that can be bought at a fraction of what you would have to pay a professional dealer. This could be due to a number of reasons, including the fact that someone may just want to get rid of a collection they were given, or that they just don't have the time to build their collection anymore, and will be willing to accept much less than what the coins are said to be worth.

The experience of collecting coins for fun and profit can even be enhanced by coin collecting software that is now available. There is free software available that will provide checklists and pricing of coins, enabling you to keep track of any coins that are in your collection. There are also other software programs that can be purchased which can also give up to date values of coins. These can be very helpful whether you are a beginner or an experienced coin collector.

There are millions of people who have taken up coin collecting for fun and profit all across the world, with an estimated 125 million of them in the United States alone. Today's coin collectors range from young to old, and come from all walks of life. Rare coin collecting can provide a high range of profitability. The key thing to keep in mind is the longer you hold on to the coins, the more likely that they will become more valuable. Some coin collections that were worth tens of thousands of dollars 50 years ago may now be worth over a million to some collectors.

Tuesday, November 17, 2009

What you must know about investing in gold



by BankBazaar.com


India -- Non-Resident Indians included -- goes crazy when it comes to gold jewellery. With the World Gold Council (WGC) aggressively marketing social and religious functions as gold buying events, the demand has shot up in the recent years to record levels.

Research shows that over 16,000 tons of gold is there in Indian households predominantly in the form of jewellery. The value of this as per market price is a whooping Rs 27.2 lakh crores ($591 billion). That is close to twice the foreign exchange reserves held by the Reserve Bank of India [ Get Quote ].

Let's consider the factors one needs to be aware of and the knowhow of investing in gold.

Forms of buying gold

Any investor has to be aware of the different forms of buying gold.

Jewellery: The most traditional and the dominant form of buying gold in India is in fact not an investment idea.

The reason is that there are heavy losses in the form of wastage and making charges. This can vary from a minimum of 10 per cent to as high as 35 per cent for special and complex designs.

Bank coins: Again not an investment idea as the premium that banks charge for their coins is anywhere between 5 per cent and 10 per cent. Also the bank coins have lesser liquidity as they are not bought back by the banks.

World Gold Council coins: These are coins issued by jewelers who are part of the WGC network. They have lesser premium over the market price (1% to 2%) and are redeemed at the market price when one takes them for selling off.

Bullion bars: These are good modes for investment but the minimum investment here is much higher than a common investor can think of.

Gold Exchange Traded Funds: ETFs are a hot option these days. These are like mutual funds that invest only in gold. They are proving to be an easier and safer mode to buy gold. The charges are very less and the gold can be accessed electronically. The disadvantage is that one never gets to 'see' one's holdings.

Current income

Gold in any form does not give any current income. The only exception is the dividend option in the gold ETFs. If held in the physical form, there is only outflow of cash for the maintenance of lockers.

Capital appreciation

Historically, gold has been the perfect hedge for inflation. This is based on data from the year 1800 AD. But in terms of absolute returns gold has fared rather poorly giving returns at only 0.8% above inflation.

Real estate and shares beat gold squarely on the capital appreciation front. Real estate and shares have given returns of about 11% over inflation since 1979 (1979 as that was the year the index called Sensex was formed).

In the short run, however, gold is a very strong bet, compared to shares which are highly volatile. The idea for gold investment will be to use it at times when the markets are falling and when the inflation is very high.

A 5 per cent of the overall investment portfolio can be considered for gold investments (bullion, WGC coins, gold ETFs). Jewellery is not an investment as far as personal finance goes. It is only an expense for pleasure, symbolising wealth.

Risk

Gold does not carry much risk at least in India, as we hardly see deflation in the real sense. Even when the official figures where showing negative inflation (deflation) during the last year, the actual prices of food items were increasing. This was reflected in the gold prices too.

The real risk with buying gold is in the opportunity cost of investing in other avenues that can actually give higher returns.

Liquidity

Gold scores the highest in terms of liquidity, compared to all other investments. At anytime of the day and any day gold could literally be converted to cash. Banks would give you a jewellery loan. (Remember though that many banks do not give loans on coins, including their own).

So would your friendly neighborhood pawn shop. They can also be sold in some pawn shops, though many are cautious to purchase in these outlets for fear of 'stolen jewellery'.

Gold jewelers would exchange your gold possessions for other gold jewels. But the problem here is that there is going to be making and wastage charges involved again. Here we lose the value (to the extent of 10% to 35%) of gold jewels.

An unfortunate social aspect in most families in India related to liquidity is that, gold has sentiments attached and is the last item to leave the house in case of financial difficulties. This negates the entire purpose of gold having liquidity.

Tax treatment

Gold suffers capital gains tax as per the IT act. So it is better to ask your jeweler for the bill. Close to 90% of the gold jewellery traded in India is unbilled. This is a serious problem for those who look at gold as an investment. Only the branded jewelers would automatically give you a bill. At other places ask for one.

We can make use of indexation benefits when calculating the capital gains of gold. So the tax payable will not be much.

Gold does not have any other tax benefits.

Convenience

Gold scores very high here. But with the per gram price rising, the smallest single investment is becoming higher. With the emergence of Golf ETFs the convenience to hold gold for the short term has increased many folds. Instead of holding cash for the short term, one can today make investments in Gold ETFs.

Conclusion

Gold has proved itself time and again to be the perfect hedge for inflation. But to look at it as a hedge avenue, Indians are yet to consider this market actively as the purchases continue to be dominated by jewellery.

Gold only beats inflation. It fares poorly when compared to real estate or shares when compared on the basis of real inflation adjusted returns.

Any serious investor, however, is advised to have a certain percentage of investment in gold to hedge inflation.

Friday, November 13, 2009

World gold supply runs out



By Ambrose Evans-Pritchard


Global gold production is in terminal decline despite record prices and Herculean efforts by mining companies to discover fresh sources of ore in remote spots, according to the world's top producer Barrick Gold.

Aaron Regent, president of the Canadian gold giant, said that global output has been falling by roughly 1m ounces a year since the start of the decade. Total mine supply has dropped by 10pc as ore quality erodes, implying that the roaring bull market of the last eight years may have further to run.
"There is a strong case to be made that we are already at 'peak gold'," he told The Daily Telegraph at the RBC's annual gold conference in London.
"Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore," he said.

Ore grades have fallen from around 12 grams per tonne in 1950 to nearer 3 grams in the US, Canada, and Australia. South Africa's output has halved since peaking in 1970.
The supply crunch has helped push gold to an all-time high, reaching $1,118 an ounce at one stage yesterday. The key driver over recent days has been the move by India's central bank to soak up half of the gold being sold by the International Monetary Fund. It is the latest sign that the rising powers of Asia and the commodity bloc are growing wary of Western paper money and debt.
China has quietly doubled holdings to 1,054 tonnes and is thought to be adding gradually on price dips, creating a market floor. Gold remains a tiny fraction of its $2.3 trillion in foreign reserves.
Gold exchange-traded funds (ETFs) – dubbed the "People's Central Bank" – have accumulated 1,778 tonnes, making them the fifth biggest holder after the US, Germany, France, and Italy.
Ross Norman, director of theBullionDesk.com, said exploration budgets had tripled since the start of the decade with stubbornly disappointing results so far.

Output fell a further 14pc in South Africa last year as companies were forced to dig ever deeper - at greater cost - to replace depleted reserves, not helped by "social uplift" rules and power cuts. Harmony Gold said yesterday that it may close two more mines over coming months due to poor ore grades.
Mr Norman said the "false mine of central banks" had been the only new source of gold supply this decade as they auction off reserves, but they are switching sides to become net buyers.
Barrick is moving fast to wind down the remaining 3m ounces of its infamous hedge book over the next twelve months, an implicit bet on rising gold prices over time.

Mr Regent said the company had waited too long to ditch the policy, which has made the company enemy number one among 'gold bug' enthusiasts. The hedges oblige Barrick to deliver part of its gold into futures contracts set long ago at levels far below today's spot prices.
The strategy worked well in the falling market of the 1990s, but has cost the company dear in lost profits this decade. "Hindsight is always 20/20," said Mr Regent, who was appointed from the outside earlier this year.

Barrick bit the bullet in the third quarter, taking a $5.7bn charge against earnings on hedge contracts. Liberation is at last in sight. In 2001 the hedge book topped 20m ounces.
Mr Regent said the hedge policy has weighed badly on the share price and irked investors, becoming a bone of contention at every meeting. The financial crisis brought matters to a head as markets fretted about counterparty risk. "It was clear to me that there were a significant number of institutions who wouldn't invest in Barrick because of the hedge book," he said.
Barrick produced 1.9m ounces of gold last quarter, down from 1.95m a year earlier. Costs have been "trending down" to $456 an ounce, though rising energy prices pose a fresh threat. Total reserves are 139m ounces, far ahead of rival Newmont Mining at 86m.

The hedge book venture has not been a happy one, but those who predicted that Barrick would eventually "blow up" on its contracts may owe the company an apology.