Diamonds and other collectibles
Thought I would share the sorry state of the 'rare' coin market with readers following the recent articles regarding investing in diamonds (see Why diamonds could be an investor's best friend and Diamonds: Easy to buy, harder to sell, October 7).
Our SMSF had a relatively small investment in rare Australian pre-decimal coins. These were all purchased through an accredited dealer over a period some 20 years or more ago. Each year the same dealer has given us a written valuation for a fee. Our balance sheet showed an increase in value of about 450 per cent based on these valuations.
Given the more onerous rules surrounding collectibles from the end of this financial year we decided to sell the coins and put the money to work elsewhere.
The surprise (shock) is that the auction house can only realise roughly 20 per cent of the valuation. After commission this is not only a dollar loss but a very large real loss given the time we have held these coins.
Like diamonds 'rare' coins are easy to buy but extremely difficult to sell at a profit.
No more exotic investments for us!