Ancient Coins as an Investment

The study of coinage has long held a reputation as ‘The Hobby of Kings’, and traditionally major banks and institutions such as The Bank of England, Alpha Bank, Deutsche Bank, UBS and Bank Leu have maintained world class collections of ancient coins. Some of these have been the heaviest of institutional long-term investors, and others such as Merrill Lynch having also held significant short-term portfolios in the past and realised exceptional sales.

Reasons to invest in ancient coins

1)       Discreet, tangible investment. Coins are material assets and held in the investor’s possession, as opposed to being a ‘paper’ or theoretical investment subject to third party control. Coins are highly liquid investments and are easily portable. They are small, and can be easily stored in a safe or deposit box. They can be easily transferred from one individual to another, and private sales can be agreed without recourse to a third party. They can be bought and sold in whatever country the investor so wishes, offering excellent potential to minimise tax liabilities. Total discretion may be ensured both at point of purchase and sale. 

2)       Potential for both short and long term gains. For many, the ancient coins market represents an extremely attractive alternative to investment in other more traditional assets or indices, and indeed coins have often greatly outperformed share indices. They have been collected for centuries, and have demonstrated a long term trend of rising values.  The Knight Frank Luxury Investment Index reports the return on coins over the last 10 years at 225%, compared to a FTSE 100 return of just 55%. Over the period, there were only four periods when the value of the index dropped, and even then the drop was only 1% or less. As a buy and hold asset, investors could certainly do worse than coins. Short term gains however are equally possible: an excellent example may be found in a rare and beautiful silver coin from the Greek city of Akanthos, circa 425 BC, recently sold at auction by Roma Numismatics Ltd. Having been advised to purchase the piece at auction in 2010, the owner paid 26,000 Swiss Francs (approximately £18,000). He then re-sold it at auction with Roma Numismatics in 2013, where it realised £42,000 – a compound annual growth of over 32%. Such gains can be regularly reproduced through careful selection, exploiting either superior knowledge or imperfections in market information.  

3)       Low correlation to other markets. The market for ancient coins is international, and they are assets that have low correlation to other more mainstream investments. Coins are well insulated against volatility or downturns in other markets. Indeed, ancient coins showed great resilience during the 2008-2010 financial crisis. The coin market itself is very stable, and not subject to the constant fluctuations that characterise most other commodity investments.

4)       Historic and aesthetic appreciation. Ancient coins often possess great aesthetic qualities, with some being reckoned among the greatest surviving works of ancient artists. Most if not all also possess historical significance, and can usually be placed within a specific historical context, such as the rare and prestigious gold staters issued by a besieged Athens during the closing days of the Peloponnesian War, for which issue the Athenians melted the gold statues of Nike on the Akropolis, or the ‘Ides of March’ gold and silver coins issued by Brutus and his co-conspirators following Julius Caesar’s assassination. As evidence of social, economic and political events, coins are a matchless physical record.

5)       Low maintentance. Coin collections, unlike share portfolios, do not require constant pruning. Unlike fine wines, stamps or even paintings, coins require little in the way of attention or maintenance once purchased. They do not require a specific storage environment, and will not require expensive restoration or cleaning. Gold never tarnishes; silver only improves as it slowly develops iridescent colours and the desirable grey toning that comes with age.