The Lucrative World of Rare Tangible Assets
By Rich Checkan
I believe we all have a bit of the 'collector' gene inside of us. We gather things throughout our lives... things capable of reminding us of a good time or a pleasant memory. It's a way of capturing the moment to be relived at some point in the future.
My Dad had the 'collector' gene for sure. He collected mugs, decals, spoons, coins, stamps, Emmett Kelly paintings, Boy Scout council strip patches (CSP's), Hummel figurines... and the list goes on.
My Dad was a collector because he never had any desire to sell the items he purchased.
Do you know anyone like him?
I received only a tiny sliver of the 'collector' gene from my Dad.
Outside of soccer jerseys, everything I 'collect' of value is for potential sale. In this regard, I am an investor. I buy with a clear understanding of how to sell from the start.
Do you know anyone like me?
The Need for Alternative Investments
When I joined my uncle, Michael Checkan, and his late partner, Glen O. Kirsch, over 18 years ago, Asset Strategies International (ASI) was primarily a precious metals bullion and foreign exchange dealer. Back then, we bought and sold numismatic coins, but it was a tiny portion of our overall business.
Over the years, most of our clients purchased gold, silver, platinum and palladium bullion coins and bars. They are liquid stores of value for a potential financial crisis you hope you never have.
Today, we continue to evolve into a full service Rare Tangible Asset dealer. We have aligned ourselves with experts in both the rare coin and rare stamp markets to bring these products to our clients. For rare coins, we work with Doug Winter, the foremost authority on pre-1933 U.S. rare gold coins. For rare stamps and ancient world coins, we work as the North American Representative to the icon of rare stamp collecting, the 158 year-old Stanley Gibbons, Ltd. based on the Strand in London.
To us, anything intrinsically valuable, with good liquidity, is worthwhile owning for any investor looking to preserve purchasing power.
Why? Simple. Fiat currencies do not do this well.
Take a dollar bill in your hand and look it over for a second. What is it? Where's the value?
It is a promissory note. It is the promise from the United States government they will preserve the purchasing power of that piece of paper. If they hold their promise to you, you will be able to buy the same amount of goods and services for that dollar bill 5, 10, 15 or more years from now as you can today.
The problem is governments don't keep their promises.
The dollar continues to lose purchasing power at an alarming rate. Unfortunately, history tells us this trend is not likely to be reversed. No fiat currency has ever stood the test of time. They all lose value due to government mismanagement of the currency.
The promise is a hollow one.
But, you can protect a portion of your overall assets with intrinsically valuable Rare Tangible Assets – gold, silver, platinum, palladium, rare U.S. and ancient world coins, and rare stamps.
Over time, although the dollar loses value, real assets such as these hold value. So, when needed, you can cash them out for more dollars than you initially paid – and still be able to buy the same amount of goods and services you used to be able to buy with your original dollar.
And, although the governments of the world may fail to keep their promises to you, you can still preserve your purchasing power – your hard-earned wealth.
Steady, Uncorrelated Growth
Take a look at the chart below...
Why is it Rare Tangible Assets, such as rare coins and rare stamps, are able to consistently appreciate with little in the way of downturns?
The key driver of these Rare Tangible Asset prices just so happens to be the same reason there is little to no volatility and even less correlation to other assets and markets.
The Rare Tangible Asset markets are driven by collectors...not investors.
Picture yourself as a collector of rare stamps for a moment. You just spent the better part of a decade searching high and low for the last stamp to complete your collection. You found it. And, although it may be a bit pricier than you imagined, it is there... right in front of you.
Assuming you could afford the price being asked, do you snatch it up to complete the collection? Or, do you risk the possibility of another decade-long search for another example?
I think you get the picture.
Now, assuming you took the plunge and completed your set, consider the following:
• Ben Bernanke announces the beginning of QE3.
• Vladimir Putin's soldiers take a stroll down the Crimean Peninsula.
• Janet Yellen announces QE3 will be unwound by the fall.
• Tensions in Israel and Palestine escalate to armed conflict.
• Bear Stearns collapses.
• AIG fails.
• Real estate values plummet worldwide.
Given what you went through to acquire your prized stamp, would you even consider selling it for one second?
Of course you wouldn't. That's the power of a collector-driven market.
How to Spot Rarity
On May 30th, 1903, in the Stanley Gibbons Monthly Journal, there appeared an article written by Charles J. Phillips entitled Stamp Collecting as an Investment. In the article, written over a century ago, Mr. Phillips suggests a simple blueprint to collecting the right stamps for investing success.
In essence, if you are to invest in stamps (or other premium tangible rarities), you need to follow and, as much as possible, combine the Five Golden Rules:
1. Rarity – ensure you buy rare, sought after items
2. Quality/condition – ensure you buy those in the best condition
3. Provenance/authenticity – make sure you can guarantee the authenticity
4. Liquidity – make sure there is a market for your items
5. Price – buy the best you can afford
What's An Investor to Do?
As I mentioned up-front, I believe we all have a little bit of the 'collector' in each of us. Given what we know about fiat currencies, regardless of your motive to purchase, time has treated Rare Tangible Asset investments well.
Whether you are like my Dad, like me, or somewhere in between, I strongly urge you to:
• Learn more about Rare Tangible Assets
• Find some room in your portfolio for this stable, proven asset through rebalancing
• Acquire a diverse portfolio of rare stamps and rare coins
Rare Tangible Assets are certainly not main stream. But, interest is growing. And, given their results dating back decades, indeed interest should be growing.
Consider a trip into the lucrative world of 'for profit' Rare Tangible Assets today. I am convinced you will be glad you did.
To request a copy of the full text of Charles J. Phillips 1903 article, call me at 877-340-0790 or send me an email at firstname.lastname@example.org.