Rare coins and other tangible assets still can out-pull the stock market in
the short-run, and in the long-run, can give stability to an investment portfolio. That's the
inescapable conclusion of a new examination of the key components that once comprised the annual
Salomon Brothers survey of tangible assets.
Salomon Brothers released its first study of tangible assets some 23 years ago this past June, in 1978. To the surprise of many on Wall Street, and elsewhere, rare coins turned out to be a long-term investment vehicle that outperformed equities. The coin market exploded as a result of the survey and a variety of other economic factors.
For a dozen summers that followed, the Salomon Brothers examinations were closely watched by many investors, as well as collectors -- all of whom wondered how an objective examination of the rare coin market would fare. A number of other tangible asserts were also brought into the comparison.
The Salomon Brothers survey met its demise in the 1990's, a victim of its success. The Federal Trade Commission complained that it was being misused by the unscrupulous who failed to properly disclaim what needed to be disclaimed -- and to advise readers of the fundamental weaknesses in the rare coin market.
Re-creations of that list in the year 2001, and a comparison with years past, show that the rare coin market remains a strong vehicle even as the Dow and precious metals rise, and fall, with regularity. The irony is that as the Dow Jones industrial average shoots up, and down, a hundred points at a clip, coins have held solidly without the volatility associated with the stock market; and that there remains a strong trend-line that points positively for the future.
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