INTRODUCTION
WELCOME TO SUPERIOR PRECIOUS METALS, INC. Superior Precious Metals and its parent company Superior Galleries trace their history to 1930 and have been faithfully serving clients for over 75 years in the rare coin and precious metals markets. As one of the largest and most highly regarded companies in our field we specialize in matching both sophisticated numismatists and brand new investors with the high quality rare coins and precious metals that meet their portfolio’s needs. In 2007, Superior Galleries was acquired by DGSE Companies, Inc. (AMEX: DGC). This event marks the continuing expansion of services of the DGSE family of companies. Superior’s acquisition by DGSE demonstrates a long-term commitment to the rare coin industry, believing that numismatics should be a key component in
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the diversified portfolios of our high net worth clients. Both Superior’s and DGSE’s continued involvement with numismatics and precious metals is strong evidence of the stability and value represented by timely, strategic investments in rare coins. Since our founding, Superior has grown into one of America’s premier rare coin and precious metal dealers by never wavering in our attention to the interests of our clients. Combining a unique blend of industry expertise, longevity, and financial strength, we are able to offer a complete range of services to any investor. The next time you are ready to buy, sell, or trade precious metals or rare coins, Superior Precious Metals will be happy to put over 75 years worth of experience to work for you.
Coin collecting in the United States became popular almost as soon as domestically produced coins were first made. Although many of the early collectors were Englishmen, prominent American collectors of U.S. coins like Lorin Parmelee, Virgil Brand, Louis Eliasberg, Sr., and T. Harrison Garrett subsequently became the cornerstones of the market. Today, rare coins are considered sound investments and have been featured numerous times in the Wall Street Journal, Barron’s, Money Magazine, and numerous other financial publications, as well as CNBC. Investment professionals from Harry Browne to independent financial planners have recommended that some portion of one’s overall wealth be placed in a position of rare coins and precious metals.
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accomplish portfolio diversification. Often, inexperienced investors equate numismatic investing with similar investments in stocks and bonds. However, a short-term perspective will likely lead to disappointment. Rare coin investing should be part of a carefully considered approach to creating a balanced portfolio, with the coin component providing a strong counter cyclical influence on U.S. dollar denominated elements. This approach “spreads out” one’s portfolio and reduces risk. Using this approach a purchaser of rare coins and bullion has a framework for protection against the weakening trends in the currency and securities markets. Superior Precious Metals and related companies as part of DGSE Companies Inc (AMEX: DGC), have been involved in all financial aspects of the rare coins and currency industry for over 75 years including research, trading, buying and selling. We feel that the present environment of uncertainty in the global economic climate, as well as changes in the U.S. financial markets, represents a unique opportunity for an opportunistic investor to create a rare coin investment portfolio.
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Informed investors have long considered coins not only as a means for capital appreciation, but also as a way to secure long-term investment goals. By establishing a confidential, low-key way of protecting investment assets, the fluctuations in the dollar-related portions of ones holdings may be balanced. Rare coins provide a unique opportunity for personal enjoyment as one accumulates an asset with both beauty and intrinsic value. This asset class inherently stays in demand, hence providing inherent safety for even the novice investor. As knowledge is gained in the numismatic (rare coin) field, many investors will focus on certain pieces that may be undervalued; pieces that can enjoy a higher profit potential when sold. Investing in rare coins should always be considered a long-term investment. Additionally, the potential investor should consider this asset class as a way to
We have built thousands of successful relationships over our many years in the trade. A strong following with collectors, dealers, and investors which include some of America’s most wealthy families has enabled us to maintain an impeccable reputation. This gives our clients an advantage in these markets when either purchasing or selling. Our abilities and honesty are well known on several continents through personal relationships, affiliations, and expert representation. We proudly offer the same to you!
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INTRODUCTION
AN INTRODUCTION TO RARE COINS
RARE COINS
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HOW DO I INVEST IN RARE COINS
8 Important Questions and Answers about Investing in Rare Coins
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WHAT IS A RARE COIN?
Webster's defines "rare" as something not frequently found; scarce; uncommon or unusual. The word "rare" as it is used in the numismatic industry has a more vague meaning. Because a coin's rarity is relative, many coins are referred to as "rare coins" even though there may be 500,000 of that specific coin in existence. For example, 484,000 specimens of the famous 1909S VDB Lincoln cent were minted, and more than 4,000 pieces have been certified by the leading third-party coin grading services, yet that coin is deemed to be eminently rare and desirable.
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A coin can be "rare" because of a relatively low mintage, a low survival rate, and/or because nobody wants to sell the specimens they have. Demand also plays a role in a coin's rarity. Whether there are six or sixty examples of a certain coin, if it is sought after by more collectors than the number of coins known to exist can satisfy, then it is "rare" relative to the demand.
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IS THE CONDITION OF THE COIN IMPORTANT?
It is the condition of a coin that determines its grade (i.e. VF- Very Fine, AU- Almost Uncirculated, MSMint State). The difference of just one grade can, at times, mean many thousands of dollars to a coin’s value, so YES it is very important. Although there is
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no specific grade to exclude, the general rule of thumb is that a higher grade coin from a certain series will usually be in greater demand than a lower grade coin of the same series and therefore have higher appreciation performance.
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HOW CAN I BE ASSURED THE COINS ARE GENUINE?
Today, several third-party services exist which can objectively determine the authenticity and condition of coins. The two largest and most preferred of these are: Professional Coin Grading Service (PCGS) and Numismatic Guarantee Corporation (NGC). These companies encapsulate the coins to preserve their
condition and assign a unique serial number to each coin, so that its identity can be verified. Both PCGS and NGC issue a written guarantee of their conclusions on the authenticity and condition of the coin. Their opinions and guarantees are widely respected and accepted in the rare coin industry.
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Genuine
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RARE COINS
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History
RARE COINS
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HOW MUCH DO RARE COINS COST?
Quality rare coins can be purchased for as little as $300 or as much as $7,000,000. However, the general price range for a large percentage of high quality rare coins is between $1,000 and $25,000.
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HOW LIQUID ARE RARE COINS?
Rare coins are by far the most liquid of all collectibles (i.e. art, stamps etc.). While there are currently two teletype/computer trading exchanges in existence for coins, these trading systems are not the heart of the industry. The great demand that exists in the numismatic community for attractive and truly rare coins are usually
purchased on a sight-seen basis among the most knowledgeable dealers and collectors privately, at public auction or at the many rare coin shows and expositions worldwide. If you are a motivated seller most coins can be sold within hours to a few days.
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RARE COINS
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WHAT IS THE BEST SOURCE FOR BUYING RARE COINS?
Auctions often provide access to major rarities that are otherwise unavailable. During the auction process you may also gain insight of the desirability and demand of a certain coin and the “high end” market in general. We conduct seven major Elite numismatic auctions each year at our sister company Superior Galleries. Coin shows and bourses provide an open forum for obtaining many treasures as well. Our professional numismatic staff attends most major domestic and international shows and coin conventions, and will personally assist you in building your collection.
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Superior Precious Metals offers individual consultation for our clients everyday. As one of the top rare coin and precious metal brokers in the country we are able to aggressively negotiate favorable prices on behalf of the investors that entrust us with their business. Building a rare coin and precious metal portfolio does not have to be difficult when we are only a phone call away. Call 1-888-741-4549 to speak with one of our representatives.
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DOES THE PURCHASE OR SALE OF RARE COINS HAVE TO BE REPORTED TO THE IRS?
Under current tax law, rare coin dealers are not required to report purchases or sales to the IRS regardless of the transaction value. This allows clients a unique privacy option that might not be available in
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other investment opportunities. Remember, each individual seller is obligated to report gains or losses on his/her own tax return.
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ARE ALL COIN DEALERS ALIKE?
No. Dealers are as individualized as coin collectors. While the majority of dealers are ethical and honest, each has a different personality and style which may or may not blend well with your own. Some may be struggling to make a sales quota to cover daily expenses. Some are so large it is unlikely you will receive personalized service with a professional numismatic advisor.
like, “How long have you been in the business?” “Do you sell coins from your own inventory?” “Why do you think I should buy that particular coin?” Because we are interested in earning your business over the long-term, our focus is different than many other dealers and brokers. Superior has over 75 years in the rare coin business and our prominence in auction venues, wholesale trade, and brokerage services speaks volumes for us and will for you as well.
You should find someone who you feel has your best long-term interests in mind. You might ask questions 7
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Security
IS AN INVESTMENT IN RARE COINS AND PRECIOUS METALS RIGHT FOR ME? For a long time the rare coin market was driven by collectors, not investors. Many of these collectors became interested as young people through organizing their pocket change by the dates and mintmarks on a coin board. A small percentage of these youngsters developed a long lasting fascination with coins and began collecting rarities that did not exist in their pocket change and had to be purchased from dealers or other collectors.
The modern rare coin market is significantly different from what it was even 50 years ago. The introduction of the independent third party grading services has added a significant layer of security for the collector and investor alike. By ensuring that everyone can equally judge the state and condition of a coin, these independent grading services have leveled the playing field and allow even the most novice numismatist to understand the value and investment quality of rare coins.
Investment 7 Major Advantages of Rare Coin Investment
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Advamtage
RARE COINS ARE A HEDGE AGAINST INFLATION
We have not experienced high inflation for almost 20 years and, for some, it may be a distant memory. However, most experts agree that the United States is showing all the signs of once again heading towards a higher inflation rate. The Consumer Price Index is consistently rising, the federal deficit is exploding, the long-term decline in the value of the dollar is persistent, oil prices continue to rise, the money supply is increasing and unemployment is
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creeping upward; all signs that inflation will continue on a multi-year upward trend. Inflation can have a devastating effect on the majority of the other investment options available today. Rare coins and bullion stand as one of the few examples of investments that actually perform better when inflation is on the rise.
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TAX-DEFERRED APPRECIATION
Rare coins enjoy very favorable treatment from a tax standpoint. Investments in rare coins can grow as tax deferred assets. By taking possession of your coins at the time of purchase and retaining them for at least six months, you will be taxed at the lower
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capital gains rate. Additionally, under certain circumstances, rare coins can qualify under section 1031 as a “like-kind� exchange allowing investors even greater flexibility for portfolio growth.
INVESTMENT
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Privacy
PRIVACY
Unlike the vast majority of other major investments, rare coins are not subject to federal disclosure rules. As long as the coin you purchase carries at least a 15% premium over its metal content, there are absolutely no reporting requirements for either a pur-
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chase or a liquidation of your investment. This allows an investor to construct a rare coin portfolio in almost complete privacy. Few other investment options can match this characteristic.
Portability
PORTABILITY
Many investors believe that their portfolio contains “Portable Assets,” but the definition intended to apply here is “assets with significant, concentrated wealth that are moveable across state or international boarders without disclosure, registration or export/import duty.” Most significant portfolios are often totally dependent on assets that require some disclosure or registration for transportation. Nevertheless, the most prudent investors always seem to have assets that are portable so that wherever the in-
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dividual desires to travel, assets with significant and concentrated wealth are available for use. To move rare coins is as simple as transferring your wallet. A single rare coin, packaged in a third party plastic holder is about the size of a credit card, about as thick as your pen, and typically weighs less than two ounces. A single rare coin can have a concentrated wealth in denominations that you select: thousands of dollars, tens of thousands, hundreds of thousands and even over a million dollars.
TRANSFERABILITY
Responsible wealth planning and protection plans often include significant preparation for the transfer of wealth from generation to generation. Assets that are bearer instruments, are concentrated in value, are small and light weight, and are easily shipped globally make perfect assets to facilitate wealth transfer.
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INVESTMENT
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LIQUIDITY
Liquidity
With the advent of the independent grading services such as NGC and PCGS, rare coins have become one of the most liquid of all collectibles. Since 1963, the rare coin industry has benefited from a published weekly dealer to dealer price sheet (The Coin Dealer Newsletter) for all important U.S. coins. No other collectible market has a pricing structure published as frequently or as accurately as rare coins. Most coins can be sold in a few hours to a few days, if needed. In addition there are major auctions and coin shows every month that allow even more flexibility for liquidating your investment when the appropriate time comes.
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APPRECIATION
Even with all the other advantages of investing in rare coins, one must remember that appreciation is the ultimate goal of any portfolio component. Your investment strategy must allow you to withstand many different economic environments and hard assets such as rare coins and bullion are an essential part of any well rounded portfolio. Maintaining appreciation throughout your entire portfolio is the planning goal, and achieving this goal requires assets in the portfolio with different characteristics. This allows appreciation in certain areas when others may be performing at a lower level.
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For the most part, rare coins are as liquid as a single telephone call to Superior Precious Metals, Inc. Superior is always interested in buying your rare coins and has the capital in order to immediately purchase your collection. As a subsidiary of Superior Galleries (one of America’s largest and most respected numismatic auction companies), Superior Precious Metals can also facilitate consignments for one of our seven yearly rare coin and currency auctions.
Appreciation Rare coins and bullion have consistently out performed almost every major equity index over the last 40 years, including the S&P 500, the DJIA and the NASDAQ 100. Even more compelling is the fact that hard assets have traditionally faired even better during periods when inflation is on the rise, the dollar is weakening, real estate prices are dropping and other commodity prices such as oil are rising. The graphs on the facing page clearly demonstrate how hard assets, such as rare coins and bullion, serve as an effective diversification tool and have significantly outperformed the equity markets for almost 40 years.
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INVESTMENT
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Call Superior Precious Metals today at 1-888-741-4549 to learn more about how rare coins can become a Superior addition to your investment portfolio. 11