Portfolio Program

Rare Coin and Precious Metals Portfolio Program

investment-portfolioWhen considering using rare coins and precious metals as a hedge against inflation, protection from stock market uncertainty, and/or the continued devaluation of the dollar, many factors should be considered.  What are your goals? What options are viable to be considered when building a precious metal and rare coin portfolio? How do I diversify within the portfolio? How long should I expect to hold the position? I am certain there’s an endless number questions on the subject.
First and foremost it is important to develop a relationship with someone you can trust; someone who has a working knowledge of the market and understands how it works; someone who has an understanding of the different avenues available when building an investment portfolio.  With over 40 years involvement in coins and metals, Lake Houston Coin & Bullion has an understanding of the market and how to recognize opportunities for our clients.
Typically, a precious-metals based portfolio is comprised of three main areas within the market. These areas include bullion, generic certified coins and certified rare coins. Within these areas will be opportunities that involve gold, silver and platinum. In order to properly construct a portfolio it is first important that an understanding of these three areas be established.

 

Bullion: In basic terms “bullion” refers to any coin, ingot or bar which trades in direct relation to the spot price of the metals it contains.  Take for example Gold American Eagles. If you are holding these coins in one ounce increments, they will change daily as the spot price of gold changes on the open market. Typically they will trade at a very small percentage above their intrinsic or “melt” value. It is important to note that privacy can sometimes be an issue as certain governmental reporting requirements may apply when liquidating bullion positions. Call for more details.
Generic Certified Coins: The term “generic” refers to a coin that is rarer then bullion but can be affected by both spot price movement and supply/demand scenarios. Unlike bullion, the generic coins are pre- 1933 minted coinage that has been encapsulated by a third party grading service (PCGS or NGC).  And because of current laws, they are considered numismatic and as such offer more privacy then most other bullion options. Historically these coins have been the entry level coins of choice for investors seeking involvement into the coin market due to their ease of liquidity, privacy from government reporting and popularity. They should be included as part of a well balanced portfolio.
Certified Rare Coins: Certified rare coins are those that are typically available in very limited quantities and are valued more for their rarity then their intrinsic value. Historically, these are the coins that have produced the strongest return. In fact, over the last 30 years, rare coins have out-performed stocks, bonds, real estate and even bullion. Understand that, while supply/demand factors continue to play a key role in the increasing value of these coins, it is important that you acquire the right coins. Staying in areas that offer continued demand for a coin is critical for value growth. In some cases a coin may only have one or two examples that exist but the market has no demand for that particular coin. In this case the only thing more rare then the coin is someone who is interested in acquiring it!  At LHCB we use our over 40 years of experience in rare coins to locate the best values within the main stream rare coin market. By focusing in on lower population areas we have had the opportunity to illustrate positive returns for our clients.

 

At Lake Houston Coin & Bullion, our constant involvement in the rare coin market has allowed us to gain the knowledge and insight to customize a portfolio to meet or exceed your particular goals.  Let us apply that knowledge and insight into building a profitable, long term relationship that will be beneficial to all parties involved. We thank you for the opportunity to earn your business.

 

Portfolio Examples: Many of our clients have a specific amount they are looking to involve in the metals market and are seeking to diversify into the three areas mentioned above. With that in mind, LHCB offers three different programs for your review and consideration. Notice that each program has differing levels of involvement within the bullion; generic certified coin and certified rare coin arenas. Also keep in mind that these are only examples and can be customized to accommodate your comfort level and goals.

 

Associate Program: $10,000 to $50,000Houston Rare Coin Dealer
An entry level position, the Associate Program is structured to minimize risk while involving a combination of bullion,generic and rare coins. Within this package the distribution will be divided into 40% bullion; 35% generic; and 25% rare coins. This package has been designed with the new client in mind who is seeking initial involvement and offers a well-balanced exposure to the rare coin and precious metals market.

 

Houston Rare Coin DealerExecutive Program: $50,000 to $250,000
As a second tier level, the Executive Program has been designed to be more of an even distribution within the bullion, generic and rare coin areas. The philosophy in this program involves more of a longer term hold while still offering the ease of liquidity for the client. Levels involved within this program will be roughly 35% in bullion; 35% in generics; and 30% in rare coins. Once again, the program can be customized and adjusted to the client’s preference.

 

Presidential Program: $250,000 and AboveHouston Rare Coin Dealer
The Presidential Program has been tailored to more of a rare coin position with diversity into generics and bullion.  Keeping in mind that some clients are seeking a position of long term holdings, this program allows for the acquisition of truly rare certified coins and, as available, condition census coins as well.  Many of the clients involved at this level consider building sets of certified coins to complement their positions. In this program up to 50% would be designated for certified rare coins and the balance would be divided equally between bullion and generic coins.