Many people like to gift children collectible coins as stocking fillers, but their investment potential at the upper end is often underappreciated: rare coins minted investors with an almost 60% return over the decade to 2022, and the real record-breakers can fetch millions. Read on to learn more about some of the most sought-after examples.
The world might be hurtling towards a cashless future, but there are still many who put great store in physical money in the world of numismatics – the collection of rare notes and coins (and medals).
It is easy to see why the accessibility of coins combined with their rich cultural symbolism has made collecting them a perennially popular hobby: children can start young with coins from their holidays and progress to more serious cataloguing of historical artefacts as they, and their financial means, grow. What might not be so obvious, however, is just how well coins can perform as an investment.
Coins have in fact far outstripped several of their sparkly co-collectibles: jewellery returned 6% over a year and 44% over ten, while the corresponding figures for coloured diamonds were 4% and 16%
According to the latest Knight Frank Wealth Report, coins have delivered an 8% average annual return and 59% cumulatively over a decade. Coins have in fact far outstripped several of their sparkly co-collectibles: jewellery returned 6% over a year and 44% over ten, while the corresponding figures for coloured diamonds were 4% and 16%. And, while luxury cars may have performed better over a decade, revving up 185% in returns, it should be remembered that a coin collection will be very much easier to store and keep in mint condition. As with all collectibles, the practicalities and costs of storage, insurance, valuation and auction have to be given due consideration. We always have to be thinking about returns net of all costs and fees.
Appraisal and insurance
One thing that has made things very much easier to get started in and sustain coin collecting as a passion was the 2022 launch of CoinSnap, an AI-powered coin recognition and valuation app, which means collectors can now get a good idea of what their collections are worth before paying for professional appraisal (other apps are available, along with simple cataloguing tools).
Professional valuations are of course vital for auction purposes, and you would be well advised to get items of any significant value given an expert appraisal for insurance purposes too. You might find though that it is impossible to get sufficient ‘single item’ coverage for a valuable coin through a regular insurance broker, and a need for more customised, high-value policies is one reason why wealth management clients often prefer boutique insurers too (see our explainer on the benefits of private client insurance here).
Top Tip
I was surprised to learn that coins ranked so highly among collectibles in the returns stakes, which just goes to show how important it is to have an overview of the whole investment universe to maximise growth. Your collectibles may or may not form a significant part of your wealth strategy, but at the very least it is vital to ensure all of your assets – including ‘passion assets’ – have appropriate insurance and are taken into account for estate planning and inheritance too.
The right wealth manager can take a holistic view of your wealth management needs to implement all manner of solutions. Get in touch so we can tell you more today.
Lee Goggin
Co-Founder
Golden eagles
You would certainly need some very heavy-duty insurance coverage indeed for some of the coins that have come to auction in recent times. The reasons for stellar coin valuations vary, but clearly rarity value, association with significant events and people, and even mistakes in their minting are big factors.
Take for instance UK pennies issued in 1933. As there was a surfeit of these coins, only a handful were issued – with the result that one sold for £73,000 in 2016.
The reasons for stellar coin valuations vary, but clearly rarity value, association with significant events and people, and even mistakes in their minting are big factors
Then we have the legendary 1822 Half Eagle, the most famous and sought after of all American gold coins. Their rarity value is down to their intermittent issuance and moreover the fact that a very large proportion of these coins never actually made it into circulation at all and were instead melted down almost immediately by bullion dealers. At the time European coins were 16:1 silver to gold, whereas the Gold eagle was a very much more appealing 15:1. The result is that these coins hardly ever come up for sale and when one does, the bidding gets intense: in 2022 a $5 dollar Half Eagle issued in 1821 fetched an incredible $4.6m at auction.
Age is of course a big determinant of value, and it is often the case that even common coins are worth far more than their face value simply due to the high proportion of precious metals used in minting them – and of course both gold and silver are set to soar further as safe haven and inflation proof assets are sought.
Silver hedgehogs
Yet we do not have to reach very far back in the annals of time to find exciting coin collecting opportunities.
In 2008 the UK-minted 20p coins without the year and in 2011 issued Aquatics Olympic 50p pieces with a mistake in the wave pattern. While neither of these are going to make anyone’s fortune, the search for these or other coins which are a collectible because they represent a mistake or other historical oddity would undoubtedly be great fun.
Joining depictions of Squirrel Nutkin, Mrs Tiggy-Winkle, Jemima Puddle-Duck and the author herself, the
Peter Rabbit coloured coin (the first coloured coin to be released) now fetches close to £500 pounds
So too has been the search for the full set of the famed Beatrix Potter series, continuing the 50p theme. Joining depictions of Squirrel Nutkin, Mrs Tiggy-Winkle, Jemima Puddle-Duck and the author herself, the Peter Rabbit coloured coin (the first coloured coin to be released) now fetches close to £500 pounds.
This, and examples like the Kew Gardens 50p (the rarest 50p coin in circulation) are of course things of beauty in themselves.
And there lies the beauty of coin collecting: certainly, one can turn a very pretty penny indeed through numismatics, but at the very least enthusiasts can enjoy a collection of literal treasure in which each tiny artefact holds history, politics, economics and art.
Important information
The investment strategy and financial planning explanations of this piece are for informational purposes only, may represent only one view, and are not intended in any way as financial or investment advice. Any comment on specific securities should not be interpreted as investment research or advice, solicitation or recommendations to buy or sell a particular security.
We always advise consultation with a professional before making any investment and financial planning decisions.
Always remember that investing involves risk and the value of investments may fall as well as rise. Past performance should not be seen as a guarantee of future returns.
